Mentor Moment – How To Better Connect with Investors
As you probably already know, in a typical year an early stage VC investor will read through over a thousand pitch decks, have hundreds of meetings with founders and make anywhere from 2 to 20 investments depending on whether it’s an Angel, Seed or Series A investment.
But regardless of the investment stage, investors see a lot of deals everyday, every week and every month. Because there is only so much time in a day, they need to have a filtration process so that their time is only spent analyzing and meeting with high quality startups. Referrals from trusted contacts within an investor’s network is one of their most valuable resources. These can be in the form of current portfolio company founders or previous work colleagues among many others types. VC firms within our Founders Floor network regularly take meetings with startup companies we refer as they see our startups as high quality.
As a founder, find out who you know in that investor’s network that could potentially make a warm email introduction for you. That will at least get your pitch deck read and you could possibly move towards a sit-down meeting thereafter.
Other ways to connect with investors is meeting them at events such as conferences, pitch events and other meetup style events. Of the data points that investors use to make an investment decision, having a positive personal connection with a founder is very important. So even a short one minute conversation at an event combined with a well timed follow up email has a higher probability of leading to a sit-down meeting given your company is of interest to them.
Cold unsolicited emails to investors or pitch deck submissions to a VC firm’s website have the lowest probability of getting read and responded to but that doesn’t stop founders from trying. If you do choose to email investors directly with a cold email, make sure to keep your email short, concise and to the point. Long detailed emails rarely get read but if you respect their time with a short but impactful email, it might get read but just don’t expect a reply.
One of the questions that investors must figure out about a founding team is whether they can execute. If you try to connect with them with a cold email, realize that they do not yet know you or whether you can execute in a way that will make your startup successful. So in your emails, always explain what your team is doing now and what milestones you have for the near future. Then, in your follow up emails, reference those previous milestones that you’ve accomplished and state new milestones you will achieve by your next email update. By doing this you’re connecting the dots for the investor and showing your ability to execute while creating a relationship over time.
Always do your homework on the investor and VC firm before communicating with them. Know what stage the VC firm invests in, such as pre-Seed, Seed or Series A, view their portfolio companies for conflict of interests, and learn the areas of interest for the specific investor you’re targeting, in other words don’t pitch a partner for your mobile app company when they only do BtoB SaaS deals. Also, look for other things that you think might help build the relationship. If you do these little things, not only will the VC’s recognize them but it demonstrates to them that you care about finding the right VC partner for your company and it suggests that your company is something they should take a closer look at.
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