Choosing an investor is like getting married minus the fancy wedding and exotic honeymoon. And it is not so easy to get a divorce. So, in choosing an investor, it’s critical you are able to seek out the right partners. But how do you meet them in the first place? In his book The Secret of Raising Money, Michael Simpson talks about this subject at length. But below are a handful of the most important channels he believes every entrepreneur should know about.
Get a Warm Introduction
Undoubtedly the best outreach method is the warm introduction, i.e. an introduction from a mutual friend or acquaintance. An investor is significantly more likely to give up his time to talk to you if you come vetted and approved by somebody he knows. In fact, warm introductions are the default channel through which venture capitalists (VCs) meet new
forwp-incontent-ad1">As a result, it’s crucial you spend your time and energy focused on searching out and making requests of well-connected folks, rather than reaching out cold. But not all warm introductions are created equally. If the investor does not really know, like or respect the individual connecting the two of you, your chances of a meeting may be more hindered than improved. The investor will naturally project onto you whatever qualities he associates with the introducing party.
Create an AngelList Profile
Well Found is a matchmaking service for early stage investors and entrepreneurs. It is the most powerful online tool available for meeting investors. It allows you to search a huge database, filter as you please and reach out. Well Found’s popularity has grown so significantly that your startup’s profile is frequently the first place an investor or candidate will look when trying to learn about your business.
Connect With Them on Their Blogs or Social Media
Many investors write blogs engage with social media. People no matter how big, love getting positive comments. Some investors even discover deals through their comments. One way to take advantage of this is to build up a relationship over time via commenting. Soon after a post is released, write a response that is thoughtful and of reasonable length. Do this enough and you will get noticed. If you are looking to raise money immediately, this is not the best approach to take, but it may be fruitful if you have some lead time.
Five Tips for the Worst Method: The Cold Email
Out of all the methods of outreach, cold emails are one of the poorest uses of your time. They can work, but asking for introductions to investors is the highest ROI networking activity in which you can engage. That said, if you have to write one, here are five tips for ensuring your email is answered:
- Make it short and very direct. Introduce yourself and explicitly state the ask in the first couple of sentences. The first question the investor will be trying to answer is: Who is this person and what does he want?
- Do your research on the person to whom you’re sending the message, and customize the email as much as possible. For example, compliment the recipient on some recent achievement (e.g. a funding round, product launch etc.). Never, ever, send mass cold emails with multiple people on BCC.
- Avoid sending on Mondays. VCs typically hold day-long partner meetings, and hence accumulate a lot of email over the course of the day. Don’t send after 12 p.m. on Friday either – if the investor doesn’t get to it before the weekend, it may be lost forever.
- Offer specific meeting times and follow-up actions. For example: “I am in San Francisco Jan. 5-7, and could meet between 1 p.m. and 5 p.m. on any of those days. Offering specific options removes friction and increases the likelihood of a response.
These are just a few of the most important channels for meeting your next investor. For those of you who’ve successfully raised VC funds, what would you add to this list?
Michael Simpson is the co-author of The Secret of Raising Money
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