Personalize your outreach if you want a response
As soon as I added “angel investor” to my LinkedIn profile, I was suddenly blessed with an abundance of people who wanted to be my friend. Every day, I get at least a dozen messages offering the opportunity to invest in exciting new startups. A bunch more new friends reach out to me by email.
The ones who do their investor outreach right get my attention. The ones who don’t get a generic response. Most angel investors don’t bother to respond at all.
Founders are frustrated that they get no replies from investors. Investors are frustrated with an overwhelming amount of spam.
I’m a climate tech investor with a background in energy engineering. It says so right at the top of my LinkedIn profile. If you’re working on a new battery technology, I’m interested in learning more. If you’re developing a new protein bar, creating a better social media platform, or anything that isn’t climate tech, I wish you luck, but don’t waste your time trying to get my attention.
But being in the right sector isn’t enough. Founders need to do more than identifying the right people. A message that says, “Hi, I’m raising $1M, are you interested in investing?” goes straight into the spam heap. So does the 10 page letter in an introductory text message.
Seriously, if you don’t know how to get investors excited, and we’re a pretty excitable group, how are you going to sell products to sceptical customers?
If you want a response that leads to a discussion that leads to the possibility of investment, keep reading.
What You First Need to Know About Investor Outreach
Here’s what you need to know about individual investors and angels before you start reaching out.
- We are not VCs. Investing is not our full time job. Nobody is paying us to review decks and make investments. VCs have interns and associates to take calls with you. We do not. Unfortunately, we don’t have time to respond to everyone who messages us, so be clear about why we should.
- As individuals, it’s impossible to invest with any chance of success in a sector where we know nothing. Smart investors stick to sectors where we have expertise. To invest outside our own sectors, many of us collaborate in angel groups. To apply for funding from angel groups rather than individuals, there’s no shortcut to filling out the application on the group’s website and having it go through the review process.
- The vast majority of outreach I receive focuses on what you need (i.e. money now) instead of what an investor needs (a successful investment.) Your goal is to sell us something — stock in your business. So put on your sales hat. Don’t tell us you’re raising $1m but why we’ll make money from buying your stock.
How to Waste Your Time With Ineffective Outreach
Before we get to how to craft an effective outreach, let’s start with what’s guaranteed to get little or no response:
- Send a very short note asking me to invest. “I’m Michael, CEO of SKB. I’m seeking $1.3 million for app development. Are you looking to invest?” If I respond at all, the answer will be, “Sorry, no.”
- Send pages of details. I get too many outreaches that go on for pages. If I don’t know you, then sorry, tl;dr.
- Send me generic content. If it doesn’t say why I personally should be interested, it’s spam. And no, starting with “Hey DC” is not personalization.
- Wrong sector: As an individual, I invest in climate tech. It’s in my profile. Like most individual investors in the US, for legal and tax reasons, I can only invest in US-based startups. I even wrote an article about it. So why are 99% of founders reaching out to me building consumer products, or fintech, or life sciences, or based in London? If you don’t do your homework, don’t expect many responses.
- Ask to me jump on a call. Sorry, I’m busy. I have a job that isn’t investing. I don’t want to spend an hour listening to your pitch only to find out you’re asking for an absurd valuation or the product isn’t ready yet. If I’m interested, I’ll ask you to send me a pitch deck as the next step.
How to Craft Your Outreach to Get a Positive Response
Now that you understand who individual investors are and what we’re looking for, here’s how to reach out to us in a way that will get the best response.
- Do your homework. Find investors who focus on your sector. Know who you’re reaching out to and why that person should be interested in what you’re building. Find out what their jobs are, their academic backgrounds, their interests. LinkedIn makes that easy, but don’t stop there. Look at what they’ve previously invested in. Read what they’ve posted on LinkedIn, what they’ve liked on Twitter. How do you fit into their story?
- Make it personal. Every outreach should have a clear answer to the question — why are you reaching out to me? It is related investments I’ve made? Is it these articles I’ve written? Is it my background in computational fluid dynamics or something that resonated with you in my novel? Flattery never hurts with investors.
- Keep it short. But not too short. LinkedIn messaging is a text message. Keep it to 5 short sentences to start.
- Who are you?
- What is your startup doing?
- Why are you reaching out to me?
- What one detail about the company’s progress will get me excited (market opportunity, revenues, strategic partnerships, team, patents, etc)?
- The ask: “Can I send you more info?”
That’s it.
If you’re reaching out by email instead, rather than making it longer, use the same format for the main message, but add a few paragraphs about the company below your signature.
What Happens Next?
If we’re interested, we’ll ask to see the pitch deck. Send it together with a couple of short paragraphs about why this will be our best investment ever.
If we’re still interested, we’ll either send you questions or ask to set up a call. That’s when the real conversation begins.
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Try reaching out to Satoshi Nakamoto, the inventor of Bitcoin and head of BiteCoin Ventures.
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