Guide: Find Investors and Pitch the Right Way
10 Common Mistakes Startups Make in their Investor Pitch - Make sure when you reach out you aren't making these common mistakes
Investor Pitch Deck: What You Need To Know - Include all the key elements in your pitch
If your strategy is to find investors and send them a cold email you are probably already losing. They are busy people, and they expect you to be more savvy than that. In fact, finding a warm route in to an investor is their first test of you as a founder. What is your hustle and drive? We aren’t making a value judgement on this expectation - but we are realistic about the conditions founders are operating in. Investors want to be courted, so here is how you get that courtship off the ground and find investors and connect with them the right way.
Before: Find Investors and Understand Who They Are
Before reaching out to a potential investor, make sure you are actually a good fit for them. Certain investors only look at specific locations, sectors, fundraise sizes, stages of development, business models, and so on. If you are a consumer facing business and they invest only in B2B propositions, then don’t waste your time or theirs. Look at what they say on their website, and more importantly their portfolio companies and at what stage they invested.
For Capital Pilot users we help you find investors with our matching model. This takes out a lot of the guesswork. The model scans their previous investments and their listed criteria to give you a ranking on where you are likely to have the most success. Get started today to receive your analysis. We will also soon be releasing our investor profile database. It includes all this information so you can do even more digging and be sure they are a good fit before reaching out.
In addition to seeing if you are a fit, learn more about what makes them tick - what do they look for in founders, what sorts of technologies are exciting them at the moment, things like that. If the investor/one of the partners has been interviewed on a podcast recently queue it up for your next tube jorney and hear what is going on in their head. This will help immensely when you craft a personal message to them, and will also help you to see if they are someone you can work with.
Find Investors you want to work with
Finally, make sure they are a good fit for you. If they are an angel network, what is their investment process like? Do they have any fees? For VCs, what is their reputation in terms of their dealings with other startups? For angel investors, what is their background and experience, and what additional expertise can they lend to you? Of course, you won’t always have the luxury of being able to choose the investor you want. But there are bad actors out there so make sure you avoid them. If possible find someone you think you can and want to work with.
What if I am a great fit otherwise but too early stage?
Great question! We know that as a founder time is your most precious resource, so it seems ridiculous thinking out to the next round, or even the round after that. But, it is worthwhile to find investors and build relationships early. We see a lot of founders put together a newsletter to potential investors to keep them up to date on their startup, key metrics they are hitting, exciting new clients they are bringing on board. And it makes the next round easier because you are maintaining that interest, and perhaps even generating a bit of excitement.
The ideal is that the investor is so impressed with your progress that they reach out to you and ask about your next round. If you can do that with a quick email blast every quarter then it is time well spent.
So, how do you go about connecting with an investor that you don’t yet know? The key here is getting an introduction through a mutual contact - which is probably fairly obvious. More importantly, this mutual contact should be someone whose judgement the investor trusts.
An added benefit of this mutual contact is that you can grill them a bit before reaching out to ensure that investor is someone you do want to work with.
With this in mind, here are a few ways of finding or creating that mutual contact for the warm intro.
Capital Pilot’s Launchpad
We've built an investor network that takes some of the guesswork out of whether you are a good fit for a particular investor. And if that investor is one of our users then we can connect you directly. We don’t have relationships with everybody in the market (yet) so read on for ideas on connecting with everyone else.
Portfolio Company Founder
As mentioned - you want an intro through someone whose judgement the investor trusts. Investing in a founder is a pretty good indication the investor trusts them.
If there is a particular investor you want to connect with check out their portfolio companies on their website (or see which investments they list on LinkedIn if an angel). Perhaps you already know someone at one of those startups, or hop on LinkedIn to their employee page and see if there are any second degree mutual connections and reach out through them if possible. Don’t hide the fact that you want to know more about their investor, and if possible try to find a way to make the meeting mutually beneficial. But often founders want to be helpful so give it a go.
Mutual Connections on LinkedIn
Find the investor/firm employees on LinkedIn and much like above, find a good mutual connection that you think can make an intro. We used this method to build our investor network, and while a slightly different ask it proved to be effective.
Don’t be afraid to push on a mutual contact - again, people generally want to be helpful. Be transparent about why you want to speak with that person. Also, be sure that the mutual contact will be a good conduit. Do they seem like someone who the investor would know well and trust? Or do they just happen to be connected on LinkedIn?
Shared Interest Group
Another obvious route is whether you attended the same university as the investor, or volunteer for the same charity as an example. There are potentially mutual contacts there you could benefit from, and use that connection as the icebreaker. Search through VC partners/angel investors public profiles and see if you can identify those mutual interests.
If it is a VC then that means they have their own investors, called limited partners (LPs). These might be big institutional investors, or family offices. If you have a contact at one of these institutions who is an investor in a relevant VC then they are potentially a good route into the partners.
Investors will get a lot of event invitations, and maybe even post about which ones they are attending or speaking at on Twitter/LinkedIn. If you can, try and go to these and see if you can get 5 minutes with them to have a chat. Don’t do a hard sell on your startup - they don’t want to walk around at events and have startups just pitching at them - but try and have a conversation, ask about them, what they are up to lately - steer the conversation so that you have a reason to follow up and get their business card.
Cold Email (if you must)
If you’ve gone down all the other routes, then the cold email is your option.
What goes in your outreach
Now that you’ve done your research and know you are relevant for a particular fund or investor (either now or in the not too distant future) and you are getting a warm email intro, make sure you make the most of the opportunity.
There are a ton of great resources on what to include (see sidebar) but the consensus is this:
- Establish the mutual connection. You did this already when you got the warm intro. But you should also include another insight or anecdote about the investor. Perhaps saw them speak recently, or listened to a podcast they were on.
- Mention something specific about the fund/investor that shows you know you fit their criteria. If you are too early stage mention this off the bat so they know you are thinking ahead.
- Give them a quick, concise, straight to the point one liner about what your business does, where you are located, and how much you are raising
- Share impressive KPIs/metrics that gets their interest
- Suggest a meeting
- Include a clear, concise deck
Things to avoid:
- Asking them so sign an NDA. No VC will do it, and so no savvy founder should ask for one
- Writing a novel. They are busy, and this email (like your deck for that matter) needs to be clear and to the point. Impress them before they have the chance to move on.
- Giving the appearance that this is a form email that you are sending around to everyone. Take the time to make this personal. Especially since you’ve done the work to get a warm intro.
What we are doing to fix this
The amount of time spent finding out how to connect with investors is a ridiculous part of being a founder. You have better things to work on. That is why Launchpad exists. We aim to cut down on the nonsense by helping founders manage their fundraise, and connect startups directly to investors when they are a good match. We have a way to go before we cover the entire market. In the meantime we have tools and resources that can at least help you complete your fundraise more efficiently.