How to get warm introductions to investors

If you want to find out more about how to optimise your investor outreach sign up to my VC fundraising secrets webinar next week: https://lnkd.in/d6FwDG3E

A referral is always going to give you more relevance, credibility and curiosity than a cold email — no matter what you are trying to achieve.

It may seem obvious, because it is, that fundraising is exactly the same.

Research your investors, leverage your network, hone your message — at it’s core, it’s that simple.

However, what is surprising is that very few investors actually ask for it.

Investors will get potentially hundreds of cold, inbound investment requests every week. It is difficult to fight through the noise and who knows what mood your reader is in when they look at the very limited subject line, or first line your write in your cold email.

Getting a referral does a few things that put you miles ahead of anyone coming in cold:

1. They make you relevant — by coming in, warm, through a trusted channel, they make your fundraise more relevant than anyone elses they’re getting in cold. The more trusted the referee, the more relevant the deal. So it definitely makes sense to work your contacts and network if you have several routes ‘in’
2. They make you interesting — a referral email is more likely to get opened and the referee can introduce you in the email (which you will probably draft btw) to instantly make you sound interesting and attention worthy. Draft a compelling, but brief intro / elevator pitch, that hopefully aligns with your new investors interests, so that an cover email hits the mark
3. They make you credible — a referral, from a credible, referrer, is highly likely to be…well…credible. The referrer is likely to be acting as a gatekeeper so as to safeguard their own reputation. They don’t want to pass on low quality deal flow, especially if they are an investor themselves.
4. They make you proactive — introductions (or at least the way you follow up to them) can suggest you’ve done your home work by finding out who in your contact’s network might be a relevant investor to pitch. Now of course, one of your contacts may be the person initiating the introduction — but the new investor doesn’t necessarily know that if you’re able to give them a strong intro (see other articles about investor outreach)
5. They make you ‘respond-able’ — an introduction, with you cc’d into an email, is imminently more ‘respond-able’ than a cold email. The job of the intro is to get them to look at your cover email / deck. The job of the email / deck is to get a response, the job of the response is to get you a pitch / F2F…the chain goes on. You don’t need to seal the deal through an introduction — it’s just to get you to the next stage

So, how do you go about it:

1. Research your investor universe: Firstly, as with all of it, research your investor universe. Understand what type of company you are, and therefore what your investment attributes are that you can match to other investors. Then find investors that match with those attributes — i.e. x geographic based, y stage, writing y range of cheques, with a z industry focus, with x business model (i.e. SaaS). Find the investors on investment databases or publicly available investor lists which match those criteria — they will exist — they might just take some time to find them.
2. Check on your peers: Look at similar companies to you and find out who their investors. Maybe not exactly the same business model, product, service — as that might be a conflict of interest, but find similar verticals (i.e. food / Agtech?). Find out who has invested in those similar companies in those industry.
3. Get a Target List: Pull together this list of target investors, from databases and industry analysis, into your target list. It can be good to manage these in an investor CRM tool (some of which have been specifically developed if you google them — (Visible, Affinity etc).
4. Ask Fellow Founders: You’ll have loads in common with them and you’ll enjoy and benefit from sharing notes on the challenges you are facing. Ask them who their investors are, who’s been really supportive, and if you can get an intro. Intros from a founder an investor respects is worth its weight in gold.
5. Mine LinkedIn: You can use the 2nd degree connections capabilities to find out who in your network a VC knows. It’s free, simple and a treasure trove of information. You can do something similar-ish, on Crunchbase. It’s a little-less clear who a particular investors contacts / connections are, but Crunchbase can be a good place to identify investors (especially at VC firm or who have invested in your vertical) who you can then track down on Linkedin
6. Research Investors: Once you’ve identified who you want to get in front of, do some research on them. Understand what they look for, look at who else they have invested in, and if you really want to go into detail, look at their blog posts and tweets. This enables you to articulate why you want the intro / opportunity to meet and why it would be mutually beneficial for you guys to chat. I would steer clear of investors who have invested in your competitors, but don’t be afraid of pitching to later stage investors — you can meet them to start the nurturing process (investing in lines, not dots!)
7. Make the Ask: The clear next step is to make the ask. That’s as simple as sending a brief email with an offer to draft the intro for them. “You could even tie it into one of your regular investor updates,” suggests Keith Corso, Founder and CEO of BusRight.
8. Draft Personalised Note: If they opt in, make it easy for them to help you. Enable your contact to copy and paste your draft and hit send. You can also get creative; record a Loom video with a very brief introduction about your startup and traction thus far.

A Template

Subject: Yearly/Quarterly Update from [Startup]

Hi [Name],

I saw that you’re connected with [Investor Name].

We would love to get in front of them because [compelling reason].

Do you know them well enough to make an introduction?

If so, I’d be happy to share a drafted intro note with you.

Thanks,

[NAME]

If you want to find out more about how to optimise your investor outreach sign up to my VC fundraising secrets webinar next week: https://lnkd.in/d6FwDG3E