We signed a term sheet. Then my buyer just stopped responding.
I’d already told the company the deal was happening. Then it wasn’t, and I had to explain that too.
Angel investor, first time selling to an individual buyer
Illustrative composite. A representative scenario built from how angel secondaries commonly play out — realistic numbers, written in the first person, not the record of a specific named person or company.
Deal snapshot
- Side
- Selling (attempted)
- Sector
- Proptech
- Stage at entry
- Seed
- Original check
- $22,000
- Term sheet signed
- Yes
- Deal closed
- No — buyer went silent
- Time lost
- ~6 weeks
A deal that looked done
I found the buyer myself, through a mutual connection — an individual investor who said he wanted exposure to proptech and had the funds ready. We negotiated a fair discount, signed a term sheet, and I notified the company to start the ROFR clock, expecting to close within the month.
The silence
Two weeks before the expected close, he stopped responding to emails. I later learned, secondhand, that a separate investment of his had gone sideways and the capital he'd earmarked for my shares was gone. He never told me directly — I pieced it together from a mutual contact months later.
The part that stung more than the money
Nothing about this cost me money — my shares were still mine, worth what they were worth before. What it cost was time, and an awkward conversation with the company's counsel explaining that the transfer they'd started processing wasn't happening after all. I now ask for proof of funds — a bank or brokerage statement — before signing anything with an individual buyer I haven't worked with before.
What to take from this
- Ask an unfamiliar individual buyer for proof of funds before signing a term sheet.
- A collapsed deal costs time and credibility with the company, even when it costs no money.
- Brokers and marketplaces vet buyer solvency for exactly this reason — a direct, unvetted buyer carries this risk yourself.
Every angel who has held a position long enough eventually faces a version of this decision. For the mechanics behind stories like this one, see the guide to how secondaries work.