Though not applicable to as many businesses as the internet would like you to believe, occasionally it makes sense to raise venture capital for your budding startup. But how to shop your new venture to investors and close the deal? 42 Floors founder Jason Freedman shares actionable tips on how he did it.
Step one? Don’t go in cold:
A VC once told me that out of the thousands of business pitches he receives in his office every year, his firm has never funded one that came in completely cold. In other words, the only way to get their investment was through an introduction.
So how do you avoid the cold pitch? Have your act together:
If you’re working in any startup hub, you almost certainly have friends that are working on their own startups. Ask them to help you. The first question should be, “Am I ready to fundraise?” You need to ask this not only for the answer, but also to see just how warm your friend’s introduction will be. If they like you, but they don’t believe in your startup yet, then it will be impossible for them to hide that perspective from their own investors. But once you get the go-ahead, you should absolutely ask them for introductions. And not to get too bogged down in logistics, but here’s how you should do it:
Send them a fresh email requesting an introduction to a specific investor with enough information that it can be forwarded by your friend without further editing and short enough that the investor can read it on their mobile phone. Assume that no attachments will be opened and that no links will be clicked.
Freedman has many more tips here. Also, if you’re hankering for more email tips, reach back into the 99U archives: How To Ask People for Things Via Email: An 8-Step Program.