The first part of fundraising is getting the meeting and 90% of startups fail at this point. Here’s how to make sure you get meetings with the right investors:
1. Get Warm Intros
Don’t send cold emails. While they’re the least work, they have a very low response rate and can even stop an investor taking a warm intro later. Here are the easiest approaches to getting warm investor intros:
List Oriented — Using Crunchbase or Mattermark you can find the list of all the companies in your sector with good exits and/or funding. For each company, make a list of their investors. Now you have a list of good investors for your sector, go through each profile on LinkedIn and find overlapping people in your networks that you can ask for an intro. You may have to request multiple intros to reach some people.
Network Oriented — Go to friendly people you already know in the tech industry, tell them about your company and ask for feedback. If they don’t hate the pitch, you can ask them for which investors they suggest you talk to. The response is usually a short list, but you can increase the potential leads by going through their networks online. Here’s the template for how to ask for those intros.
2. Provide a Strong Company Description
When you meet an investor in person or over email, you need to tell them why your company is special ASAP. This information should be prepared in advance and ideally in a template you can personalize.
One liner — This should be simple enough for almost any adult to understand. Skew towards simplicity over precision. If you can, avoid using someone else’s brand; although it may help understanding, it can also be negative association, for example:
Bad — Order groceries from any local store in your city, usually delivered within a few hours
Meh — Uber for Groceries
Good — On-demand groceries
Intro Paragraph — When you get an email intro, you’ll need to stand out from the inbox crowd with the high level reasons why your startup is worth their time. The Team is very important to mention at this stage but if you don’t highlight traction, investors tend to assume the worst. In addition, include a little of your long term vision to show you’re thinking big. For example:
Acmecart provides on-demand groceries. Live in 4 cities, we’re processing 1k orders/week, growing 10% week over week. Our team has deep domain expertise in logistics from Amazon and Walmart. Our goal is to provide a great delivery experience for every local store.
3. Make it Easy to Meet
Once an investor has expressed baseline interest, you need to meet them face to face, as soon as possible. However, most investors take 50+ meetings a month, so expect to work for a spot on their calendar.
Suggest Times, Be Flexible — As soon as the investor agrees to meet, suggest multiple times that work for you. You can apply some time pressure here but it’s better if it’s vague, rather than you committing to a hard date, as fundraising always takes longer than expected. If you do ask for an earlier meeting, you will have to be flexible on timing.
Prepare an Email Deck — Most funds writing $100K+ checks will want to pass on a deck to their partners for discussion. Many founders are told not to send decks, thus creating a difficult situation when a potential investor asks. I recommend you prepare a short ‘email deck’ that provides a quick overview of the core points, fulfilling the request without revealing everything about your startup. No need to make new slides, 3 or 4 from the existing deck usually works.
Getting meetings with the right investors isn’t easy, so be prepared for the work required to make it happen. If you do get the meetings you want, you’ve already taken a huge step towards beating the odds.
This article is part of a series on Seed Fundraising.
1. When to Raise Money
2. How to Build a Deck
3. VCs vs. Seed Funds vs. Angels
4. How to Get a Meeting
5. How to Request an Introduction
6. How to Get Early Momentum
7. How to make a Good Pitch Great
8. The 5 Most Common Pitch Mistakes
9. Meeting Requirements
10. The Basics of Meetings
11. How to Handle an Angel Investor Meeting
12. Know these Numbers for your VC Meeting
13. 4 Investor Gotcha Questions
14. How to Follow-Up After an Investor Meeting
15. How to Close the Lead Investor
16. The 4 Stages of a VC Process
17. How to Raise a $2 Million Seed Round
18. Go from Investor YES to Cash in Hand
19. When Investors Say Yes but Mean No
20. When and When Not to Use an Investors Name
21. Stop Making These Common Fundraising Mistakes
22. How to Avoid Bad Terms that Kill Startups
23. What to do After Receiving a Term Sheet
24. Term Sheet Problems Part 1 — Money Talks
25. Term Sheet Problems Part 2 — Boardroom Blues
26. Term Sheet Problems Part 3 — Side Letters
27. 10 Traits of Successful Founders
Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.
You can reach me here: firstname.lastname@example.org
Thanks to Kaego Rust and David Smooke for reading drafts of this.