How To Approach Investors Effectively
How to approach investors
Every night (UK time) I’m on Clubhouse with investor Angel Gambino and others in a room dedicated to helping startup founders where no fundraising-related question is off-limits. Yet quite possibly the most common question is surprisingly simple: how to best approach investors. It gets asked most days, verbatim or paraphrased.
As an early stage, modest angel investor I get a lot of pitches every week, my colleagues get even more. Most of them are cold approaches on LinkedIn or via email. Most get a couple of seconds of my attention, some, depending on workload, none at all.
BUT people introduced to me by someone I know - particularly if that person emailed me earlier to ask if it’s OK to put a startup founder in touch with me - always get a response. Therefore, tip number one is simple: if possible, seek warm introductions from your network. Perhaps some of your peers who already received funding can put you in touch with their investors, these introductions tend to be the strongest. Perhaps someone who simply knows an investor can help. Ask for favours from your network as much as you can.
Also, bear in mind it’s easier than ever to connect with investors on social media (such as Twitter, Instagram or Clubhouse) prior to sending that email. Once you’ve connected with someone, asked for advice or made yourself memorable in a different way to establish a relationship, chances are they will get back to you when you reach out with your pitch.
If you reach out cold, personalise your emails or messages according to the investor’s interests. Make sure to only reach out to those who are well aligned with you in terms of sector and stage. It’s generally a good idea to include a 3-4 sentence summary of your idea and then a link to your pitch deck, ideally along with a video explainer. In this way, you can track when the email/message was open, what links got clicked on and how much of the video got watched.
What to follow up with once you got the response to your initial email or message? The best practice is to simply ask what the investor wants to see next instead of giving them a lot of information that may not be of interest to them. In this way, they remain engaged and are likely to appreciate that you value their time.
Rounding up, investors are real people and just like everyone else have limited attention span and capacity to respond to unsolicited messages. Just like others they get irritated with blanket emailing but tend to respond to friends or close contacts. So, before your next investor approach, consider what can make you stand out in a positive way and how to engage them without appearing disrespectful of their time or unprepared.