When you’re fundraising as an entrepreneur, you need all the help you can get, especially from your existing investors. However, in most cases, you won’t get any help. Why? While your existing investors want to help, they’re busy and asking the wrong way results in minimal progress.
Don’t Send This:
Hi Ash,Are there any VCs you can introduce me to?
Hi Ash,I see you’re connected to some VCs, can you help with intros to the following people?
Duncan at Bullpen Matt at Sequoia Garry at InitializedDan at Trinity
If so, I can send a personalized email for each.
Most investors lean heavily on their personal networks to find investments. Chances are they know a lot of people who will also be interested in your company. However, the investor probably knows so many other potentials they would have to spend time to generate a list. They might be willing, but creating an intro list for you is unlikely to be their top priority.
Now that most people’s personal networks are available via LinkedIn, AngelList, Crunchbase, Twitter etc., you can do the work for them. Go through your investors’ networks and find the people you want to be introduced to. Send that list to your investor asking for help.
Don’t Send This:
Hi Ash,Can you intro me to Dan at Trinity?
If possible, can you introduce me to Dan at Trinity? We love his focus on the Enterprise Cloud and would love to bring that experience to AcmeScale.
AcmeScale makes it easy to keep your AWS bill under control. AcmeScale manages and optimizes your cloud infrastructure to deliver the best performance, for the lowest cost. We currently have 10 customers, including Hooli, generating ~$1.5M in ARR and growing ~20%/month.
Once an investor has agreed to send an intro request for you, make sure they don’t have to do any work to make it happen. They should literally only have to hit forward and send, nothing more. Don’t make an investor write up why your company is great — do it for them, otherwise you’ll experience delays.
In order to focus on their existing investments and the best new opportunities, investors have to turn down most meeting requests. Make sure your intro request includes some details on why you want this new investor on board, usually something related to their investment thesis and portfolio.
Roy Bahat has a great post going into more detail on this topic.
Don’t Send This:
Hi Ash,Sequoia said they’re deciding this week, could you ping any of your friends there for us?
Sequoia said they’re deciding this week. I see you’re connected to Matt. If possible, we’d be very grateful if you could give him an email or call for us. Here’s some points you could highlight:
1. Great team. 6 months ago we won the World Drone Indoor Championships.
2. Customers love us. Just yesterday Razor Healthcare said they’d be renewing us for their next project in a six figure deal.
3. Tech advantage. We can make any drone fly indoors, everyone else needs additional hardware.
Investors are known to exhibit herd behavior, so you’d expect them to be positively influenced by references from other investors they trust. When an investor is taking time to make a decision, you should take the opportunity to backchannel.
Like an introduction, the back channel should be a message you craft but it’s different in that it won’t be forwarded. It won’t help to use the same material as you did in the introduction, as the potential investor will have already seen that. Ideally you’d like their backchannel to feature positive updates and key points that are of concern to the potential investor.
Your existing investors want to help, but you have to give them the tools to make it happen. If you do, it can make all the difference when you’re fundraising.
Thanks to Duncan Davidson, Pejman Nozad, Garry Tan, Sean Byrnes, Garrett Johnson, Ryan Pfeffer, Ravi Belani, Joshua Levy and Howard Lindzon for reading drafts of this.