Before Asking to Meet an Investor Know Why the Investor Should Talk to You
We've written a lot here about fundraising and investor introductions. One of the key things to successful fundraise is being prepared, and one of the key pieces of preparation is to correctly target the list of investors.
Most founders start with a generic list of potential investors they get from internet and other founders. The problem is that list isn't relevant. The founder who is not doing the work, would typically send me an email like this:
Subject: Intro to Fred Wilson?
Hey Alex: We are fundraising now. Can you please intro me to Fred Wilson?
My response to that can only be "I can't.'' Really, I can't, because I value my relationship with Fred, and don't just send him everyone who asks me to, but mostly because there is no reason given. The founder didn't explain why his company could be a fit for Fred. Here is a much better version:
Subject: Intro to Fred Wilson?
Hey Alex: We know that Fred likes to invest into businesses that are networks. We are building a new kind of network for X, we've hit key milestones since launch, and we'd love to get Fred's feedback. Could you help with an intro?
This version is a lot closer to something I would actually consider passing over. The most important thing is the explanation for why the investor might be interested. Explanations that typically go well:
1. We are in the vertical that this investor is interested in.
2. We are using the model (SaaS, enterprise, dev tools, etc) that investor is interested in.
3. Our company is analogous to other companies in this investors portfolio.
The founders need to do the work to research potential investor. This equally applies to both angels and VCs. When you don't do the work, and come out with a wrong "ask,'' people conclude you are lazy and immediately pass. Each investor is different. You need to figure out what their interests are before approaching them. For example, Primary has two partners, Ben Sun and Brad Svruga. Ben invests in consumer, Brad invests in SaaS. You can tell that from their profiles.
Another example, angel investor Bob Pasker invests in dev tools and enterprise. You can tell that from his Angel List. Jim Robinson IV from RRE ventures is a thematic investor. He invests in cycles and themes that change every few years. You can tell that by reading about him.
Putting together your investor pipeline and determining your reason for speaking with each specific angel or VC is a lot of work, but once you do the work, your chance of getting an introduction to an interested investor, and eventually a check, is much higher.
Become an investor nerd. Use LinkedIn, AngelList and partner profiles. Doing the work pays off!
Alex Iskold is the managing director of Techstars in New York City. Previously Iskold was founder/CEO of GetGlue (acquired by i.tv), founder/CEO of Information Laboratory (acquired by IBM) and chief architect at DataSynapse (acquired by TIBCO). An engineer by training, Iskold has deep passion and appreciation for startups, digital products and elegant code. He likes running, yoga, complex systems, Murakami books and red wine -- not necessarily in that order and not necessarily all together. He actively blogs about startups and venture capital at http://alexiskold.net.