In the past, the venture industry was a closed club all-around. If you wanted to meet with a VC firm, you needed a warm introduction. Today, most investors would still prefer warm introductions, but this is starting to change, because:
- Investors now realize that great deals can also be found outside of typical Silicon Valley networks
- There are many more VCs now beyond the traditional firms; these VCs are hungry and are going to out-hustle traditional investors
- Many warm intros are often weak and are a crapshoot anyway
But, in parallel, while you’re waiting for these intros, you should also strongly consider cold-emailing investors directly. It doesn’t hurt.
Cold-emailing investors is fairly similar to selling your product. I’m going to assume you have a relevant list of investors you want to email and that you have their correct contact information.
Here are a few tips on cold-emailing investors:
1. Keep your email short
Just like in selling your product, you’ll want your email to be concise and readable on a mobile phone. (See my post on how to write a cold-email for selling products) ~3 sentences with maybe a couple of KPIs as bullet points. Build rapport. Say something compelling. End with a call-to-action.
2. Bullet out the best part(s) of your company
Include a KPI or two or social proof as bullets that can be scanned quickly. Mention what’s best about your company. Compelling bullets include things like:
- $20k MRR
- Growing 30% MoM
- Marquee beta clients include: Google, Boeing, and P&G
- Ave sales cycle is 20 days
- LTV to date is $1000 and CAC is $280 via Facebook ads
- Won TechCrunch Disrupt
- Team previously worked together at Facebook and built FB Messenger
- CEO previously won a gold medal in rowing at the London Olympics
- CTO was nominated for the MIT 35 innovators under 35 list
Traction helps and are good bullets if your traction is good. But, you can include bullets about your team’s background / domain experience / personal achievements. Or startup competitions you’ve won. Anything compelling about your team will work. But just put your best foot forward – what is most impressive? Avoid vanity metrics.
This leads me to my next point…
3. Make your email readable and scannable.
Investors don’t have time to read a ton. So, not only should your email be concise but it should also have great formatting so that it can be scanned in just as couple of seconds.
4. Don’t attach a deck in the first-email
If an investor wants to see your deck, he/she will have no qualms asking for one. But attaching your deck on the first email could lead to your email getting caught in spam filters and whatnot.
5. Use an email tracker.
Find out if your email is being opened. There are a ton of extensions you can use to track whether your emails are being opened. I use Hubspot’s extension.
This helps you decide on what cadence to follow up.
6. Your call to action should be to get a meeting
There’s no way you can convince someone to invest off of your cold-email. So, you should try to get a meeting. This may seem obvious, but I receive a lot of cold-emails asking if we’ll invest. You can just say something like, “What’s the best way to discuss?”
7. Don’t be afraid to follow up
VCs’ email inboxes tend to get a barrage of emails. So if you ping say even 3x in a week, it’s unlikely that an investor will even notice that you’ve pinged multiple times! At a minimum, I would follow up within the week if you haven’t heard back.
I talk about how to follow up with a VC here.
I realize cold-emailing can be very uncomfortable for a lot of entrepreneurs. I get it – it was a scary for me, too, when I first started cold-emailing potential customers for LaunchBit.
The reality is that fundraising is really a sales job. And like in sales, you’ll need to do a lot of investor meetings in order to close anyone. This means that you’ll need to somehow get a lot of lead volume. Warm intros, for many people, will not get you all the volume you’ll need, so cold-emailing investors can help get you get there.
Give this a whirl.
Cover image by Rawpixel at Unsplash.