Funding a business and finding sources of capital are some ofthe most pressing concerns an entrepreneur has. Building a business takes resources, which can be difficult to get when the funds are short. Especially if you’re a first-time entrepreneur and don’t know where to start. It’s no surprise, then, that many turn to cold-outreach on LinkedInas a firstresort.
While research from the Kaufmann Institute has shown time and again that Angel Investors and venture capitalists make up less than 15 percentof all business funding, entrepreneurs still think this capital is the only way to succeed. The attitude that you need to find someone else to fund your business is so widely accepted that many people won’t even start developing anything until they have secured someone else’s money to do it.
Asan angel investor myself and a member of the advisory boardof a venture capital fund, I’m frequently asked to invest in projects or introduce them to people who will. This, in itself, is not an issue. While many people assume that you need to have a previous personal relationship with a fund, realistically, if a project and team showpromise, it doesn’t matter where it came from.
The problem most investment pitcheshaveis threefold:
Take, for example, the start of a recent InMail I received on LinkedIn:
“Dear. Mr. Wilde,
I am writing to you because of your deep interest in healthcare…”
At first glance (and that was as much as they got in this instance), this person likely sent a non-customized email merge to anyone with “investor” or “venture capital” in their profile. There is absolutely nothing in my history that suggests I care about healthcare–unless they completely misunderstood my IT-related job at a hospital eons ago.And, of course, they missed that I’m a woman–although they could be going by Star Trek rules.
If you’re going to go the mass InMail route, at the very least filter your list more, do some research on each recipient, then merge in their proper salutations and better-targeted interests.
I received the following email just this week:
“We currently have 500 Instagram Followers, 150 YouTube Followers, and 1500 people signed up to our newsletter. We are looking for 10 investors to give us $5000 Sponsorships to help grow.”
While starting out by listing traction is good (even smaller followings are attractive to the right group), where this approach fails is by not speaking in terms of the benefit to the investor. Like the previous team, a bit of research on me would have given them insight on my own social following in those areas, and whether or not I would perceive theirs as a benefit.
What they could do instead is explain their specific demographic niche and offer to sell sponsorships (rather than ask for investments) where they will aim to drive their followers to the sponsor’s products.
At the end of fourof every fiveof these messages, whether on LinkedIn or email, they have a signoff with an ask for a follow-up.
Here’s arealexample I just received:
“I’ve attached my Pitch deck, demo video, our most recent financial projections, and some sample introduction copy to send on to other interested parties.
I’d love to schedule a call with you to discuss your investing in us right away as our round is closing soon.
Please click this link to find my available times. Or you can email me or call me. I’m located in East Coast time.”
There is so much wrong with this, I almost don’t know where to begin. This is the very first contact I’ve ever had with this person. I’ve never met them nor heard of them before, and yet they’re sending me all of this information–including financial projections. Additionally, they’re placing the burden on me to schedule a call with them, when I’m the one they’re asking something from. I recognize they believe they think they’re making this easy on me, but instead, what they’re really doing is saying they’re lazy and don’t care about my time–only my potential of helping them get money.
Don’t send all your information at once.I kind of look at it as if you’ve exposed yourself to me without my permission, and that’s certainly not going to get you funded. Instead, wait until the person shows even a little bit of interest before you open the floodgates.
With a little bit of patience and common sense, you just may get through the first hurdle of the VC world.
Language matters in sharing information, says Yelp’s Akhil Ramesh, the company’s head of consumer product. Forexample, he says, sayingthat you’re sanitizingbetweeneach customer visit, rather than just saying you’re sanitizing, is important.
Norby’s advice on reopening? Make sure yourinformation is centralized, clear and all found in one place, he says. Start with your own website, and don’t buryupdatesin your corporate blog, he adds. Also, don’t roll out changes over time in announcements that customers are then left piecing together.
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