Be Meticulous About Your Investor Funnel to Achieve Funding Success

Guest Writer
Entrepreneur, Investor, Managing Director of Techstars in NYC
3 min read
Opinions expressed by Entrepreneur contributors are their own.

Fundraising is much like sales - it is numbers game, and it is best attacked with a strong funnel. As a founder you focus on first identifying the right investors, then getting introductions and finally working through the funnel with each investor. 

You can manage the process using two spreadsheets, one for potential investors and the second for the investors you are talking to.


Getting introductions.

Setup these columns for the first spreadsheet: 

  • Investor name
  • Affiliation (individual angel, a group or venture firm)
  • LinkedIn profile (handy for introductions)
  • AngelList profile
  • Partner fund page to see current investments
  • Related investments
  • Focus area/verticals that interest this investor
  • Typical check size
  • Investments per year
  • Notes of anything you found interesting or relevant

Once you setup this spreadsheet and filled it out, you need to figure out how to get the introductions. It is not a good idea to reach out cold. Instead, you need to reach out through your network of other founders, advisors, and mentors. Select a group of five to seven people who are willing to help. Add the names of these folks as columns to the spreadsheet above. Then ask each of them to go through and put [x] next to the investor they are connected to and can introduce you. After that, you can send appropriate individual introductions.

If you don't have mentors or other founders who are willing to help, use LinkedIn and Conspire to find a path to each investor one by one. Add a column called "connection and connection notes.'' Then send individual asks and keep track of when you sent and what the response is. Iterate through the list every week. Try to go through a different connection if the one you selected hasn't been fruitful.

Getting introductions is a big part of the whole process. Get the best possible introduction to each investor and track your response rate closely.


Tracking conversations.

Once you get an introduction to an investor, enter them into a separate spreadsheet organized by stage of the conversation. This spreadsheet is like a sales pipeline. New conversations are on top and conversations that are moving along are in the middle. Commits and passes are on the bottom.

Add these columns:

  • Investor name
  • Affiliation - Individual angel, a group or venture firm
  • Check size
  • Process - typical process for getting to a check
  • Status - state of the conversation
  • Next step - what is next and who is running with it - you or investor?
  • Last touch point - last date you met, talked or got back an email
  • Who introduced you - important to thank them later / keep track of best intros
  • Notes - any other things you found interesting / relevant

 In the end of the first meeting, always ask if the investor is interested. If they are, ask about their process and the next step. This is critical. Having clarity on the process is necessary to determine if you are moving forward or not. For example, some firms have you met with one partner, then with two partners and then do a partner meeting. Some angels decide after two meetings, etc. Having clarity on the process allows you to have much better idea of the potential outcome.

Keep track of where you are and move conversations through the pipeline weekly. If investor is not responsive for a while assume it is a pass. If the investor is doing diligence, ask how long they expect to do it. In other words, proactively manage all aspects of the process and be in control.


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