Venture firms live for deal flow. The more founders we meet, the more opportunities we have to find the few founders we invest in each year. Last week, I commented on a post by Elizabeth Yin from Hustle Fund about what funds are still funding founders at pre-seed and seed stages and I decided to submit my information. The flood gates opened and I was immediately underwater.
Email in this industry is almost as insane as when I worked at a Fortune 500 – I receive hundreds of emails each week with cold outreach from founders. I spend time reading and responding to each email and this can take hours and a toll on my aging eyes.
How do you cut through the noise to get to your *dream* investor?
Research
When looking at hundreds of companies a year, investors develop a personal WHY for each company they bring to the investment committee. Do your due diligence on the fund and the person you are targeting. Find out where you fit in their wheelhouse – do you come from similar backgrounds? What is their past experience – do they specialize in specific areas of a startup like finance, marketing, or sales? What boards do they sit on and what companies have they invested in? Does your company fit their *personal* investment thesis?
Take all of this information and use it to personalize your outreach to the team member. When you are reading a ton of email, something short recognizing that they are a human goes a long way. For example, one cold email recognized that I’ve written about community and channel partnerships and played off that information. I responded immediately because I could see that they knew their why for contacting me.
Crafting your opening statement
How you position your problem and solution statement have a large impact on how the investor receiving your email will evaluate your company and you as a founder. Many of the problem-solution statements I receive are full of jargon or are from the perspective of someone deep within the problem. Eliminate jargon and assume that the reader knows nothing about the industry, business model, or competitors in your space. A strong problem-solution statement should be understood by anyone walking down the street, even a child.
To achieve this, I suggest that you test your problem-solution statement with your friends or family who know nothing about the industry or business that you are building. Ask them to describe what you are doing back to you. If they can’t do it, you need to refine your statement. I love to tell founders to practice with their kids, ages 8+, because they will give you hard feedback on what makes sense and what doesn’t.
Teasing with key facts
Give us the pot of gold to get the reader excited about speaking with you. Check out Troy’s video on the pot of gold. To summarize, you should show the investor that there is a huge opportunity in the area you are addressing – start with the market size but then make sure that YOUR BUSINESS will be large enough, and make sure you do a bottoms up analysis (none of the “if I just get 10% of the market…” analysis!!). Tell us about your traction today and a low risk path to achieving future results. Where will your sales be next year based on your pipeline? What partnerships do you have that help you accelerate your growth? Sell us on how where you are today will result in the pot of gold down the line. If you have some friendly investors you know, get feedback. Make it easy for us to say, YES I’d love to be a part of this opportunity.
How successful are you with cold emails to investors? What tactics have worked for you?
Let us know in the comments and make sure to follow MATH and me on twitter.