Hey!
If you landed on this page, you’ve probably just asked me for a warm intro to another investor; or are looking to level up your fundraising game with effective conversions.
Either way, I’m glad you’re here— while warm intros have been said to be the best way to get to the right people, let’s also not underestimate the power of a well-executed cold outreach. (More on this in the next post)
While I do believe MOST people derive a sense of fulfillment by helping others, (as cited in this study and by my mentor, James Rhee’s view of ‘kindness and goodwill in business’), I take the approach of “no one owes me anything”, and so, I need to make it “easy for others to support me, and want to see me win.”
So here’s the tactical advice to: help others help you — whether to get an investor excited directly; or to at least redirect you to someone else.
#1 DO YOUR HOMEWORK
It may seem a legitimate question to ask a friend in the business “Do you know any investors you can introduce me to?” — but the reality is doing this:
1. Shows the person you’re asking for a favor that you’ve NOT done your homework, presuming that they’re in a world where few seek the exact same thing
2. And therefore, do not necessarily value his/her time
Most folks I know in the venture ecosystem have their hands full.
I for one, am actively advising fund managers (GPs), working with limited partners (LPs) that invest in them, and also select founders (usually at the point of scale) — all of whom come into my orbit from our work at Beyond The Billion, my speaking engagements, podcast, network, and other cold outreach.
In any given week, I’m working on 30 contact points in which case the key question to myself is — what is the 20% that will move the dial on the 80% to achieve my broader mission? The answer isn’t a curated intro for every person who asks me who doesn’t even bother with doing their homework first.
Doing your homework means:
1. Build a preliminary list of *people* that would be useful to your goal — if you’re fundraising, a simple start is our [Beyond The Billion funds page] for founders with gender diverse leadership; and check which VCs invest in your:
- stage
- sector
- geography
- AND specifically, check if these funds have invested in a similar deal to yours (say if you’re a drone company that’s scaling data as a service; are there other data-as-a-service business models the firm they’ve invested in that show these funds are interested in this domain?)
- AND also check (on Pitchbook, news articles etc.) if they’ve invested in these deals say in the last 6 months – 1 year. This is because we’ll likely see more ‘zombie funds’ that are no longer investing after licking their wounds in the 2021-2022 high of valuations and cannot raise new money (also called ‘dry powder’) to invest in.
[For more on the venture outlook, my podcast episode with Samir Kaji is a great one to understand the funder perspective]
2. Note I also used the word “people” in bold. This means doing a deeper level of diligence to understand which VCs work in the firm and then, going to LinkedIn or other such platforms to see if you know someone connected to them.
If that person is me, I expect the following framing:
“Hey Sarah, I’m currently fundraising for X startup, and have made $XX in sales/traction number. I see you’re connected to Y at Z VC firm, which I’ve learned invests in companies just like us. They did a deal just a quarter ago [insert link] with a co we already have a relationship with as a supplier. Would you be comfortable with a quick opt-in email intro to them? I would appreciate it. In which case, I have an easy forwardable below and attached.”
#2 WRITE THAT SOLID EMAIL ‘FORWARDABLE’
This is my preference, and my formula is always to Keep It Simple. Remember busy individuals don’t have all the time in the world to read essays. Include:
1. Max 2 sentences in SIMPLE language about what your startup is all about. How big is the problem you are solving, and how are you approaching it?
2. Traction metric that shows you’re an outlier in the industry you’re benchmarking yourself against. Is there a virality loop already showing in the use of your product where people are sharing about their user experience? While this may not be obvious, the investor will see the potential in a lowered customer acquisition cost.
3. A personalized reason to answer the question “why do you want my money, specifically?”
This brings me to point 3:
#3 PERSONALIZE, PERSONALIZE
Are you only writing Y because she works at Z firm that you think meets the key criterion for investing in your company? If so, you sound like you may not need my help and could simply fill up an intake form most VCs have on their website.
This is fine for some who approach fundraising as a numbers game, but I’d like to think that if you’ve reached out to me for help, you know I view my relationships beyond a transaction— and so I’m only comfortable lending my social capital and time if you value the same.
This means I expect even deeper work, answering the following questions:
- Why would this investor make a difference to my captable?
- Is there a specific background, expertise, doors that only this person can open because of his/her unique qualities/experiences?
#4 ATTACH THAT NON-CONFIDENTIAL ONE-PAGER
Finally, be ready with the core information in one page; and follow-up with a full deck later once interest has been further established. I’ve had rookie founders reach out to me wanting an NDA before I even decided I’m interested. Does this mean you never use an NDA? No. But remember that your task is to make it as easy and compelling for someone who doesn’t know you to help you.
Core information to me, includes:
- Key team members (for me, upfront)
- Problem & solution
- Traction in more detail (TAM, SAM, SOM)
- Other investors in round
- Call to action + ask (including contact details!)
IN CLOSING
Remember it’s easy to feel vulnerable when you’re asking for a favor. “Closed mouths don’t get fed”— but do it in the right way, especially if you’re the one at first, deriving all the value, including demonstrating you’re committed to delivering value at any opportunity you get.
Once you’ve done the above, drop me a note. And don’t forget to follow-up (I’m human, too!).
All the best!