Subscription agreement

Definition

The document an investor signs to buy into the fund at agreed terms.

Why It Matters

It is the line between an intention and money: until it is signed there is nothing to enforce and nothing to show a lender or a seller as evidence the equity exists. Searchers underestimate the gap between a yes on a call and a countersigned document, and the gap is where a schedule slips.

In numbers: An investor agrees to $150,000 in March and signs in May. The nine weeks in between are not a formality; they are nine weeks the searcher cannot commit that money to a deal.