Get a clear mental model and actionable tactics for you as a founder to get warm investor intros
When founders need to fundraise from investors, they often struggle to connect with investors. They cold email, try to meet investors at startup conferences, ask for intros from their network of people who might know investors, but often those approaches are not effective. We’ll go into what makes a good warm investor intro.
Common myths around warm intros:
- Myth 1: I need to go to conferences to meet investors. This can be an especially bad use of founders’ time. At conferences, it is typically difficult to get time with an investor, and even if one does, then there are a bunch of other founders all trying to talk to the investor. (Side note: conferences can be amazing to meet other founders and potential customers in certain cases).
- Myth 2: I need to get to know an investor over a long period of time. There are two views on this question — some people will say one needs to build a relationship with an investor over a (long) period of time, and there is some merit to that. On the other hand, countless founders have raised money from investors and have gotten to know them through a pitching process, i.e., a short period of time. As a founder if one were to have to choose between a. spending time building the product or acquiring customers/users and b. getting to build a relationship with investors, I’d suggest that in most cases, founders should choose to build the product and acquire customers/users.
- Myth 3: Someone must know me for a long time for me to get intros to investors. There is a myth that your existing network is what will get you intros. The reality is that for most founders, they will need people outside of their networks to get intros and will need to do it in a very short timeframe.
The right mental model:
A common mistake founders make is to think they need to get to a place where the introducer would say:
“I know/met this founder and they would like to meet you.” or “You are a SaaS investor and they are doing a SaaS company”
These intros do not seem to have any explicit or implicit endorsement and seems more like the introducer is trying to do the founder a favor because the founder asked to be introduced.
Imagine being the VC that gets that kind of intro above versus getting one of the following intros:
- You should meet this founder!
- I met this founder, and I was blown away by: their resourcefulness, their traction, their clever approach to entering the market, their stellar team (they have built incredible software), they are ex-[brand name]
- I am investing in them!
- I met them, and I’d have loved to invest in them if I could
- You’d be dumb not to meet them
What you are aiming for is not simply an intro, but ideally an urgent and high-signal intro.
How to get an urgent and high-signal intro:
- Create a pitch that is clear, and gets to an exciting insight/signal from customers about what you are doing, has something truly interesting about the team or something unique about the technology.
- Work backwards from the intro you would like someone to make – what would you like them to say that captures that one thing that should grab the VC’s attention from everything else competing for their attention at that time – family, friends, significant other, Twitter, Instagram, Snap, meeting other founders, helping their portfolio companies etc
Who to ask cold intros from:
- Your existing network
- Your existing investors
- Founders you know
- Founders you do not know
How to reach the people who will make the high-signal intros:
- Research investors you are trying to reach – this is your investor list
- Cold outreach to founders they have recently invested in (don’t overthink the fit, yes similar space helps, but good founders (even if they are in a different space) can see opportunity across domains)
- Cold outreach – Email and LinkedIn —- Short message which contains these elements for a good cold outreach:
- be upfront about why you are contacting them
- state what you do clearly
- 1-2 things that should grab their attention
- if space allows, something that helps signal it is safe/worthwhile to meet you (I hate using brand to define my identity, but if you have a brand you are associated with that could help signal this, you could use that – eg, you are ex-Google, etc.)
I’m the cofounder/CEO of [Y], and we are looking to talk to your investor [VC1]. Y connects people to job opportunities in electrical engineering, and we have been adding users at the rate of 30% MoM. We have found that this market is completely fragmented and both electrical engineers and firms benefit because we bring down the search time from 6 months to 3 days. Would love to share what we are working on, and if compelling to you, would love your intro. Are you available for a 20 min call over the next week or so?
Hi x, I’m the cofounder/CEO of [Y} that connect electrical engineers to jobs, and we are growing users 30% MoM. We are raising and would love to talk to VC1. Would you be up for a 20 min call and if compelling to you, make an intro to VC1?
Remember that what you write and what you say and how you come across during the call will shape a yes or a no for intro, and also potentially shape why the person will intro you — and potentially what they will say in the intro message to the VC.
4. Refine your outreach pitch as you do these outreaches. This is a numbers game, but if done well, can create asymmetric outcomes. Say you were connecting with a founder about VC1, and you get on the call and they are bullish about you. Now they are likely going to connect you to VC1 but also other investors they know. If they are connecting you to VC1 and they do not intro to other investors, be sure to ask them if there are other investors you should be talking to and if they’d be willing to make the intro!