Broad approaches:
Get on linked in and connect with anyone you can that is an investor. This is a really fast and dirty approach and unlikely to yield a check for your company, but is beneficial for expanding your network and also practicing your pitches. Investors are really busy and fielding phone calls from guys like you all the time, but they’re also afraid of missing out on really good opportunities. If you cold connected to 100 investors on linked in with a mildly compelling note, you can probably close 20 intro phone calls. This is 20 more phone calls than you have now, so it’s a good way for you to start. Don’t plan on getting money from any of them, though (investors aren’t just looking for good deals. they are looking for good deals, at the stage of company they like investing in, in the vertical they specialize in, that they believe they have a compelling way to add an unfair strategic advantage to, IF they are in the right part of their fund lifetime). However, it will be very helpful for you going forward to have conversations with these first 20 people.
How to find these people:
Get on angellist and just peruse the investors. look for them on linked in. you can also go to various incubator websites, like 500startups, techstars, and any in the extend techstars network.
You can probably connect to about 300-400 on linked in before they try to shut you down for spamming. spread it out over the course of a week. any time they respond, turn around your email within 24 hours ALWAYS, and request a specific time.
Template for connecting on linked in:
Hi, I saw that you’re an {{ investor on angellist and you invested in Pandagram | advisor for 500startups }} and I wanted to introduce myself.
My name is randomrover and I’m working on koalagram, instagram for koalas.
Things have been going great, {{ give a concrete metric for your success, you said things are going great }} — but we’re struggling to get to the next level.
Given your experience with {{ something relevant that makes them know you researched them }} I thought you might be able to shed some light on why my koalas keep getting eaten by tigers/something that might suggest they have expertise in your problem (money is not your problem).
I’m not looking for money at this time, I just wanted to connect to see if you might have a recommendation. Could we connect on the phone sometime next week?
Obviously, the better you filter your leads for fit, the more likely you will be to get responses. But if you start getting people who are too popular, you’ll get nothing. balance this appraoch. your time is valualble. its not a terrible idea to just send these blindly as a start.
With these linked in queries, when you get email responses, try to set up a phone call. startup folk have a huge pay it forward culture, so they’ll often be willing to take a short call. remember, your counterparty is busy, so try to schedule a 15 minute (yes, only 15 minutes) phone call for them. If you can’t tell them everything you need to in udner 5 minutes, practice it again.
Remember you’re not looking for money with these phone calls. You’re looking to: (a) refine your pitch (b) get feedback.
With every conversation, always ask these questions at the end:
- what could i have done to communicate the idea clearer to you sooner (not necessarily the business idea, but whatever the point of your call is)
- again, i’m not asking for money (and they might not even invest in your vertical), but what would have to change for someone LIKE you to become interested in considering an investment in koalagram?
- could you introduce me to someone who might be interested in talking about this or who might be a lead in the future for considering investment?
- can i add you to my quarterly koalagram update newsletter? if it makes sense for us to talk again in the future, we can reconnect.
(you should have a quarterly or monthly update letter to keep yourself current in the minds of your targets. email them about what you’ve done, progress you’ve made, successes, failures, ask for help etc. investing money is just a step in a long relationship, and keeping them in the loop helps them stay mentally invested)
Targeted approaches:
Much like the broad “find investors” approach, but actually identify the right candidates based on what stage of company they like investing in. so, “pre-revenue, post product mobile photo apps for koalas looking to raise a seed round”.
Now, same story. stalk them on linked in.
However, instead of just connecting, find out who they’re connected to that you know and try to find a chain to a warm intro. get the linked in premium account so you can see more info here. you’ll have to buy the 75/mo executive package to see the names of 3rd degree connections. you’ll only need this for one month.
(Hint: if you aren’t willing to invest 75 for a chance to connect to the right investor who might cut you a 6 or 7 figure check, you’re not ready to start looking for investment. go do ONE HOUR of freelancing work to pay for the fee. not to sound harsh, but if you’re not ready for that, you have prioritization problems. if its important to you, you’ll find a way to raise 75 bucks. will it definitely pay off? no. but you need to be willing to roll the dice with that 75 bucks to even be a candidate for someone to invest in you.)
Now find mentors who are connected to the investors you care about. or friends who are connected to the mentors. this is a longer game, but will yield higher conversion rate to the top. balance your time allocaiton appropriately. Pet theory: startups fail because founders suck at time allocation and waste time, like by writing reddit responses like this one.
Another approach here is to find similar companies on linked in/techcrunch and figure out who is investing in them. founders help founders (if you’re a founder not helping other founders, you suck). they’ll often chat with you, even if you’re a competitor. also, find similar companies, or companies you complement and then find the people who are investing in them. appraoch the portfolio company, build rapport, then explicitly ask for the connection to the investor.
The key to these targeted approaches is making the other person feel important (like the key to human relationships and sales). You can do this with:
- ego fluff (hey you’re awesome and i loved your blog post about twitter tips! (sounds cliche, and everyone knows what is up, but it still works)), or
- by demonstrating that you’re putting time and effort into connecting with them (like by doing research on their company, past, investments and tying it in to your request (a form of flattery still)).
People want to be loved. give them that and they’ll give you something back.
A few important rules:
- you have to create connections — if you’re afraid of reaching out to people you don’t know, then you’re tanked. your only option is to succeed by sheer force of a successful product that is blowing up. if you don’t want to make the connections, find a cofounder who will, or hire someone who will.
- be explicit — don’t dance around the issue. founders, investors, mentors are all busy. a little foreplay is fine, but when you want a connection, don’t just try to be buddies and hope they’ll say “oh, by the way, would you like an intro?”. copy and paste this line: “hey Jack, if you feel comfortable with it, would you mind making an intro to Jill from ABC capital for me? I can send you a separate email as a request for an intro that you can forward on to her”.
- make it easy for them to say yes — again, they’re busy. if they have to do work to help you, it’ll die. if they just have to forward an intro email or listen to you babble for 15 minutes (remember, intro phone calls only 15 minutes! its easier for someone to say yes to a 15 minute phone call than risk an hour of their time).
