How should you follow up with an investor?

When I was an entrepreneur, I wasn’t really sure at what point to follow up.  And sometimes I felt like I was writing to a black hole.
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Has this happened to anyone else?  You write an investor an email – maybe something like this:

Hi Bob,

Thanks so much for taking the time to meet with me last week about my company LaunchBit!  Per our conversation, I wanted to see what happened in your all-partner meeting?

Best,

Elizabeth

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Originally posted by exploringboring

And then *surprise surprise*, Bob does not write back…  What now?

When I was an entrepreneur, I wasn’t really sure at what point to follow up.  And sometimes I felt like I was writing to a black hole.  And am I bugging this person too much?  Does this person hate me?  Hello??  Anyone there?

Now that I’m on the investor side, let me explain a little bit about what ends up happening – at least if you email me:

We meet.  I tell you I’ll think it over / discuss your deal / figure out next steps by X date.  I go to my next meeting.  And either close the loop at the meeting or say the same thing.  I go to my next meeting.  In fact, I do all of my meetings back-to-back…for most of the week.  While I try to actually follow through by X date, inevitably I’ve erroneously overcommitted, but it’s still in the back of my mind.  But I’m juggling so many meetings that I haven’t had time to sit down and think yet or take action, so I still have nothing new to tell you while also having been in your shoes, I realize time is of the essence.  And then you email me, and this becomes top-of-mind again, but I still have so many meetings that I haven’t gotten around to it.  And then a couple hundred emails pile on top of yours, so it goes to the back of my mind again.  And then you email again with a new update.  And your deal becomes top-of-mind again, but the cycle continues.

It’s pretty bad, and I know this happens for a lot of VCs.  I’m not justifying this behavior – it’s not right, and investors should change their behavior, but I wanted to illuminate what is really happening and how to navigate this.

1) Keeping pinging – be persistent

Don’t be afraid to keep following up.  I used to think that investors would get annoyed if I bugged them so much.  Frankly, now on the other side of the fence, I have so many emails in my inbox, I don’t even notice if someone has pinged me three times.  Some tips on following up:

  • Send your follow ups when you say you will
  • If you get no response, follow up within the week – ideally 3-4 days later
  • If you still get no response, ping again 3-4 days later
  • HAVE A CALL TO ACTION!  If you just send an email saying you have a business but no action you want the recipient to take on it, you will likely not get a response because the recipient won’t know what you want.
  • If you are writing to American investors, direct asks are best, because recipients are busy and don’t want to spend time interpreting what you really want. Are you asking for a meeting about your seed round?  Or are you asking for something else?
  • This kind of goes without saying – don’t be an asshole.  Emails like, “Listen stupid, you haven’t responded yet” don’t work.  Be polite and direct
  • In fact, don’t even address the fact that the recipient hasn’t responded yet.  It sounds desperate.  Just pretend that he/she never received the email in the first place.  And in fact, sometimes that happens.

To be honest, this was all kinda intimidating to me when I was starting out as an entrepreneur.  I was a bit afraid to keep pinging a black hole inbox.  If this is scary to you too, here’s a quick plug for my side project event called Rejectionathon, which can help with this.  Rejectionathonis a one-day event in SF & NYC that helps founders build a thicker skin and get over their fear of rejection.  The next one is in two weeks on Sept 10 and use my code EYFRIENDS to get 50% off.

Just keep at it.

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Originally posted by catalystinc

2) Try different communication channels

If you cannot get ahold of the investor by email, try different channels.  Almost every investor is on multiple platforms: email, phone, Facebook, Snapchat, etc…  Try them all!  In fact, email is probably his/her most saturated channel, so it may be hard to get attention there.  But if you are friends with him/her on another platform, then pinging off-email may yield better results.  When in doubt, there’s also always the good ole fashion phone.

3) Be nice to an investor’s assistant and ask for help

It goes without saying that you should treat an investor’s assistant with a ton of respect.  But, take it one step further.  Be friendly.  An investor’s assistant is actually the MOST POWERFUL PERSON at the firm.  He/she controls the investor’s calendar, and while the investor still may not 100% follow that calendar, he/she may be able to nudge the investor or slot you in for another meeting if you are still having trouble.

4) Create urgency

Lastly, make sure to create urgency for your situation.  If you’re trying to get in touch because you are raising money, it helps to create urgency.  An investor will make you his/her top priority if your deal is going to close tomorrow.  Now, the question here is credibility – you can’t say your deal is going to close in a week unless it really is.  And, a big mistake that entrepreneurs make is to say, “Oh my round is closing next week and we have a ton of interest.”  And next week comes and goes and no one has committed to the round!  And all of a sudden the entrepreneur looks either like a liar or someone who cannot follow through.

So the urgency you create must be real and something you know 100% you can deliver on.  Here are some things that can say to create urgency:

  • You have a Demo Day coming up on X date, and your price will likely go up afterwards.  Side note: 500 Startups is taking new applications for the next batch.
  • You are in 2nd meetings with a number of investors (this must be true!) and you expect the round to close soon.
  • You only have $X left in the open round and about $Y amount of high level interest from the investors you’re talking to, so you need to know soon.
  • You are only raising a small $X on a convertible note at $Y cap, and after you hit that, the price will likely go up.  (Note: use this only for investors who don’t lead rounds)

Creating urgency is a good thing, but remember, you must be credible, otherwise, it can backfire on you and your character.

As for me, I’m trying to rectify this behavior in VC by starting with myself.  Here are some of the things that I’m doing to stay more on top of things:

  • I very rarely take meetings.  Taking too many meetings is the root cause of many of these problems.
  • But, I now talk with even more entrepreneurs, because I’ve moved almost all of my communications to email.  You can figure out all the key parts of a business (except for the team) by email quickly, and you get a paper trail of notes without doing extra work.  And, it automatically goes to our CRM.  I’ll talk to the team last with a meeting if we get there.  I learned this technique from my mentor / friend / investor David Hauser who actually invested in LaunchBit without even taking a meeting with me!  All of our communications were over email.
  • I use Inbox Pause based on Tony Hsieh’s Yesterbox philosophy to process email faster about 10x faster than I used to mostly.
  • I block out time everyday for no meetings so that I can think and email.

This is still a work-in-progress, but I’m getting there, and I hope other VCs who struggle with this will work on ways to be more responsive to entrepreneurs as well.

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