Fundraising
What is First Close?
A first close is the point at which a fund has secured enough commitments to begin investing, even while continuing to raise more capital toward its target. Investors who join at first close are early backers.
A first close marks the first legally binding milestone of a fundraise: once a GP has gathered a critical mass of commitments, it can hold a first close and start deploying capital. The fund then keeps fundraising until a final close.
First-close investors sometimes receive incentives (such as a fee discount) for committing before the fund is proven.