Closing Deals in Q4

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Out-of-office auto replies are getting set and meetings are getting pushed due to holiday travel schedules. With Q4 in full swing, a lot of the workforce has fully entered its annual “let’s circle back in the new year” era.

But for startups, the fourth quarter is never really quiet. Investors and founders are still closing deals, as seen in the 86 pre-seed to Series B deals that have closed since October 1 in the Southeast region alone.

But what is really happening in the startup fundraising world right now? We chatted with investors, founders, and service providers all working on active deals to get a better sense.

The Practical Realities

"There's always a few deals pushing to close during the holiday season and right before year-end," said  Joe Berklund, a partner at Gunderson Dettmer's Atlanta office. "But it can be harder for founders looking to fill out venture rounds and get institutional leads if they're just starting new conversations around Thanksgiving."

David Pierce, partner at Atlanta-based Founders Legal, sees that term sheet "just don't go out much past mid-November," noting that the "practical realities" of holiday schedules push most conversations into January or February closes.

For founders convinced they need to close before year-end, investor skepticism runs high. Joe Mancini of North Carolina-based Front Porch Venture Partners said any startup pushing for a quick close should expect pointed questions, including, “Why the urgency, what the uses of capital will be, who is participating so far, what their runway looks like, and whether the round will have a staged or a single close."

Founders closing deals in Q4 have typically been providing detailed updates for months, signaling their plans well in advance. "If you are just now sending out the plan, you should shift your expected close into Q1," he said, "because anything that feels like 'we are closing now, hurry up!' will give investors pause for a few months, if not forever."

What Might Be Motivating Deals?

Christopher Fagan, a partner with Moore Colson and the firm’s Transaction Advisory Practice Area Leader, told Hypepotamus that those rushing to get a deal done by the end of the year are likely reacting to a “triggering event.”

“For example, when you have a change of administration and you're concerned about the tax consequences of that change - that can put a lot of pressure on deals to get closed by the end of year. This year you don't have that lever driving the markets. We had a lot of estate tax concerns going into this year, but OBBBA alleviated some of those concerns about getting your estate in order because the bill made the estate tax exemption permanent,” Fagan added.

“The motivating factors for getting a deal closed this year are basically nonexistent; The only reason someone would be trying to get a deal closed prior to year end is if they see a tax strategy specific to them that they're trying to execute on. But generally speaking, the deals we're seeing, there's...none of those factors in play right now. Essentially - we are not changing administrations, and OBBBA alleviated the concerns around estate taxes.”

Several startup founders who are currently out on the fundraising circuit who spoke to us on background for this story. The reasons they are trying to push a deal through by the end of the year? Dwindling cash reserves they know won’t last through the first quarter of 2026 and a need to hire tech talent quickly were some of the main talking points.

Q4 Deal Flow

Despite the fundraising headwinds, Q4 remains busy for certain types of deals. Berklund noted that the fourth quarter "tends to be the busiest time of year for deal flow," though that activity skews heavily toward M&A rather than venture rounds.

Mancini reported Front Porch's deal flow is ahead of last year, with a notable shift in composition.

“We invest in both funds and startups, and a number of funds are back out in market pushing for a Q1 2026 close, so diligence is full-swing on that side of the portfolio. On the startup side, from our perspective, we are ahead year-on-year from a count and quality point of view. The composition of deals has also changed with more priced follow-on rounds versus the bridge rounds that were taking a lot of our attention at the end of 2024,” Mancini told Hypepotamus.

Fagan's firm has seen steady Q4 activity, particularly in business services, electrical, and infrastructure sectors. Since Labor Day, inquiries have surged, though those haven't yet translated into closed deals. "I would expect Q1 of next year to be fairly robust," he said.

Some Bright Spots

One bright spot for founders? Angel investors.

"The deal cycle of angels is so much shorter," Pierce said. Many angels recognize Q4's slower institutional pace as an opportunity, moving quickly on SAFEs, convertible notes, or bridge rounds. "Those savvy angels are active in the holidays because they know Q4 is slow for all these other constituents, and [there might be] an opportunity to invest at a discount."

Berklund's advice? Start conversations early. "If possible, have the term sheet or LOI in place and workflows started so you're not working across from people on the other side who may not share your urgency."

For founders already in conversations with VCs, Pierce offered tactical advice: keep those relationships warm. VCs "love what they do," he said. "If you can give them something to chew on over the holidays and have that regular conversation, you won't be restarting in January."

While most of the business world might treat December as a write-off, the startup fundraising calendar doesn't observe holidays. Mancini summed it up simply: "We are hardly ever off-the-clock."