We have written a lot here about fundraising and investor introductions.
“One of the key things to successful fundraise is being prepared, and one of the key pieces of preparation is to correctly target the list of investors.”
Most founders start with a generic list of potential investors they get from the internet and other founders. The problem is that list is not relevant.
The founder who is not doing the work would typically send me an email like this:
“Subject: Intro to Fred Wilson?
Hey Alex,
We are fundraising now. Can you please introduce me to Fred Wilson?
Thanks!
John”
You know exactly what my response will be to that–I can’t. I really can’t.
Not only because I value my relationship with Fred, but I do not just send him everyone who asks me to.
It is because there is no reason given.
The founder did not explain why his company maybe a fit for Fred.
Here is a much better version:
“Subject: Intro to Fred Wilson?
Hey Alex,
We know that Fred likes to invest into businesses that are networks. We are building a new kind of network for X, we have hit key milestones since its launch, and we would love to get Fred’s feedback.
Would you be able to pass a forwardable intro?
Thank you,
John”
This version is a lot closer to something I would actually consider passing over. The #1 important thing is the explanation for why the investor might be interested. Explanations that typically go well:
We are in the vertical that this investor is interested in.
We are using the model (SaaS, Enterprise, Dev tools, etc.) that an investor may be interested in.
Our company is analogous to 2-3 other companies in this investors portfolio.
The founders need to do the work to research a potential investor. This equally applies to both angels and VCs.
When you do not do the work and come out with a wrong way of asking, people think you are lazy and immediately pass.
“Each investor is different. You need to figure out what their interests are before approaching them.”
For example, Primary has two partners Ben Sun and Brad Svruga. Ben invests in consumer, Brad invests in SaaS. You can tell that from their profiles.
Another example, angel investor Bob Pasker invests in Dev Tools and Enterprise. You can tell that from his Angel List.
Another example, Jim Robinson IV from RRE Ventures is a thematic investor. That means he invests in cycles and themes that change every few years. You can tell that by reading about him.
It is actually a bunch of work to put your investor pipeline together, and to come up with the reason for why you would want to speak with the specific angel or VC.
But once you do the work, your chance of getting an introduction, interest from an investor, and eventually a check is much higher.
Become an investor nerd. Use LinkedIn, AngelList, and partner profiles. Do the work, it pays off!
Image credit: CC by SnapIncome
