Milestone 5
Get Meetings
With a qualified list and a tracking system in place, It’s time to start reaching out, talking to money folks, and build rapport.
Step 1: Make initial contact with various pull and push strategies.
Investors already in your network (family members, friends, your accountant, lawyers, advisors, mentors, customers, vendors etc) can be contacted directly, but you need to find creative ways to establish connections with investors who are not yet part of your existing network.
4 ways to do it (in descending order of preference)
Get Warm Introduction
Network Your Way Into Meetings
Let Investors Come to You
Do Cold Outreach
Get Warm Introduction
The best way to connect with investors is through warm introductions, meaning you get introduced through a common contact rather than by reaching out yourself.
Talk to your friends, family members and service professionals such as your accountant, lawyer, or business advisor and see if they can either invest in your business or refer you to the prospective investors.
However, the best warm introductions come from your existing investors or entrepreneurs that an investor has already backed or, a senior executive at dominant companies - find out who they are, connect with them over social media, comment on their post, tell your stories and ask for referrals.
Note that once you meet a potential investor, if they say “no” to investing in your business, don’t stop there. Angel investors or VCs generally know each other, so always ask for referrals. These are often the highest quality and most fruitful referrals.
Once someone agrees to make an introduction, send a 2-3 sentence pitch (elevator pitch) or a video pitch of your company so he or she could include it in the initial introduction email. Then follow up as quickly as possible.
Network Your Way Into Meetings
Networking through attending events and constantly expanding your network by asking for more introductions from your existing contacts works extremely well.
Join or get involved with people who may have interest and/or liking for your venture. For example, if your venture involves a new fitness app, consider connecting with gym owners, personal trainers, and fitness influencers. Engaging with this audience will allow you to showcase your app to those who are likely to appreciate its value and could potentially support or promote it within the fitness community.
You can get involved via the traditional “offline” route - joining relevant associations, attending relevant events and conferences or using “online” methods - social media, forums and websites serving your targeted community. Join the conversation, become a valued member of the community. And then tell other members about your venture (and eventually tell them that you are raising money, and how they can contribute).
So, let’s say your venture targets photographers, explore LinkedIn groups like "Photography Professionals Network" or "Photographer's Hub." On Facebook, consider joining groups such as "Photography Enthusiasts Community" or "Professional Photographers Forum." Participate actively in photography forums like "Digital Photography School Community" or "Photography Talk." Build relationships within these communities by contributing valuable insights. Once you've established trust, share details about your photography-related venture, emphasizing how it can benefit photographers, and seek their support by:
Investing money in your company - as debt or equity investment.
Investing time in your company - as mentor/advisor, or
Introduce you to other angels or VCs who might be interested.
You can also build relationships with your targeted investors through commenting on their blog posts and attending the same event with them (capital conferences, pitching events, trade shows etc.).
Look at what upcoming events your target investors will be attending, either by searching online or by following their blogs or social feeds. Go to the same events, and make a point of introducing yourself.
By meeting organically in person, you can establish a rapport and then follow up over email referencing the event, making them no longer cold contacts.
Let Investors Come to You
As much as your company wants to find great investors, investors also want to find great companies—meaning it goes both ways. So, make sure you spend some time putting yourself out there. This includes:
Use social media to tell your story.
Get active and visible - both online and offline.
Publish content online - build your online authority.
Take advantage of opportunities that yield positive media attention and awareness.
Make it easy for potential investors to reach out to you.
Register with startups directory, fundraising platforms or join pitching competitions.
Your goal is to expose your business venture on platforms that could attract the attention of prospective investors, heighten your relevancy and boost your credibility. It does take time and diligence so you must stick with it.
Do Cold Outreach
The final way that you can establish a connection with an investor is through a cold email. However, this method will have the lowest response rate of all the methods we’ve discussed.
Why are cold emails less successful? Investors receive a lot of emails. While most do their best to respond, often they can’t respond to everything—so only emails that really align with their interest and seem like credible opportunities get a response, let alone result in a meeting.
Your email needs to stand out above the rest and shows that you’re not just sending out hundreds of cold emails to investors, instead, show specific reasons why you thought they’d be a good fit.
Limit your information flow until after you get a face-to-face meeting.
In your cold email to prospective investors, it is best to just send them your teaser email (and a link to your video pitch, if available). If they specifically request other documents (such as a pitch deck), then you should send them that. If they just request for “additional information”, you should just send them your Executive Summary.
It is because the goal of your emails is simply to create interest so they take a meeting with you. By sending too much information without asking, you risk presenting them with information that they might find fault with, reject and then tell other investors that they passed.
Step 2: Build rapport and increase the chances of getting a positive response.
When making initial contact with an investor, there are a few things you can do to increase the chances of getting a positive response. These tactics can also be used to build rapport with both new and existing contacts.
Direct Approach:
Personalized Message
Tailor your communication to each investor individually. Highlight aspects of your business that align with their specific interests or investment criteria. A personalized approach demonstrates your commitment and sincerity.
Add Value
Ask what you can do for them first. How can you help or add value to them? Adding value makes you a legitimate part of the investor’s network, and makes it more likely that they will reciprocate, perhaps by being more responsive, by providing advice/connections, or (ideally) by investing.
You can add value by introducing them to other startups they can invest in before you are ready to raise money yourself, giving them early use of your beta product, or finding some great talent to help them with a project.
Connect Regularly
Actively engage with potential investors through various channels. Attending same events and networking, or regularly comment on the investor’s blog with thoughtful, insightful comments. Consistent interactions build a relationship over time, putting you higher on their radar and acting as social proof.
Follow Up
If you don't receive an immediate response, don't hesitate to follow up. However, ensure your follow-up messages provide additional value or information to keep the conversation meaningful.
Indirect Approach:
Utilize Social Proof
Highlight positive testimonials, endorsements, or collaborations with reputable entities. Social proof adds credibility and can influence investor perception, making them more inclined to engage with you.
Optimize Your Online Presence
Google yourself. Conduct a thorough review of your online presence, including websites, social profiles, and LinkedIn. Ensure that your digital footprint reflects positively from an investor’s perspective.
Utilize Press and Media
Leverage the power of press and media to enhance your digital reputation. Issue press releases, contribute content to authoritative third-party sites, and seek mentions and appearances. Credibility factors from these sources can significantly impact investor perception.
Apply for Grants and Competitions
Demonstrate credibility by participating in grants, competitions, and awards. Success in these endeavors not only builds trust but also provides evidence of support from others. Consider joining startup accelerators, incubators, or crowdfunding platforms to further enhance your credibility.