It is true that warm introductions are the best way to approach investors. But is it the only way? Founders and VCs often have a limited network to meet each other. Some venture capitalists do not invest without a proper introduction from portfolio founders or other fellow fund members. On the other hand, startup founders do not send cold emails, they are afraid that it comes off as spammy. The reality is that VCs raise their funds with their deal flow as one of the selling points. If a VC rejects every founder who can’t get a warm intro, they’re just burning deal flow so it’s actually in the investor’s best interest to be open to cold emails. There is an unlimited upside, with zero downside for founders that send cold emails. However, it doesn’t mean that you can set up auto-cold-outreach to every Partner at the firms you find in multiple VC databases. This is not a numbers game. Gaining the skill of smart cold emailing will be a helpful tool for every founder. We, at Big Sky Capital, receive lots of cold requests for investment, however only a few of them are well-prepared to save time on both sides. In this article, I will highlight some common mistakes and tips for approaching VCs.
Venture capital firms are different. There are lots of points that stack up to an investment thesis like geography, verticals, stages, check sizes, and others. Spend time to understand the goals and preferences of each investor you’re approaching. This will help you to figure out whether they’d be a good match for your company or not. Every VC firm pays attention to its online presence, you can start from the website (this is ours), LinkedIn, Crunchbase, and end up with personal profiles of the partners or associates. The web tends to be the best source of research early in the process, but you should also try to get information from founders who have directly interacted with a particular firm. 15 minutes of homework will save you and your recipient precious time. If you are sure that your startup is a right fit for the investment thesis of the firm, there is no shame in cold emailing them, but do it right!
If you read my previous article on Being ready for a VC investment, you already know that VCs do not invest in completely unproven businesses. You need to show some positive signals that you are ready to fuel your startup with outside money. There are some types of signals with examples:
These are just examples, but these types of signals will win the attention of the recipient to look through your deck and start a conversation. If you do not have at least 1 positive signal, consider accelerators or angels instead.
After all the prep work, it is time to draft the email itself. Simple and well-structured email is crucial. Keep the length of your cold email to an investor around 50–200 words. You only have a few seconds to make the initial impression and the full email pitch should take only around 45–90 seconds to read. The longer the email, the less reply you get.
The subject of the email is the most important part to pay attention to. You should combine there two previous parts: Research and Strengths.
B2B SaaS —20% MoM MRR — $100K MRR— US — Seed
Proptech/Fintech — 2x exited founder — Singapore — Pre-seed
Avoid these types of subjects: Startup pitch deck, Investment opportunity, or Best in class AI startup.
Email must get the VC to open your pitch deck. Use simple words describing your company and achievements. Use numbers, even if they are not so impressive, it is better than “meaningful revenue” or “massive market”. Always make a call to action, try to set up an intro call, Calendly might help with that as well. If they find your email body interesting, they want to know more right away. Make sure to attach a pitch deck up front. Use online formats like Google Drive, DocSend, etc. That way, you can easily track viewers and update the file as needed. I personally like the Notion format with all the slides and data combined on one page. About the pitch deck in the next articles.
Given you seek to invest in B2B solutions and that Singapore is one of your target geos, you should probably be interested in learning what we’re building here at Startup
We brought Startup to change how people buy properties and secure home loans in Singapore ($75B market). Our AI-powered platform quickly matches buyers with their dream homes.
Facts about us:
The founders work together for 10 years and had 2 startups before.
ARR $1.5M, 3x YoY growth
50 enterprise clients + $500K in qualified pipeline
We are raising $1M and 40% already committed. Currently, we’re finalizing the deal with VC Firm, SEA’s leading tech VC firm. Make sure to check the Pitch deck for the current state of things and traction. Thanks!
Would love to elaborate. How about an introductory call?
CEO of Startup
It’s always best to get a warm intro when you can. An intro will guarantee you at least 5 minutes of attention. However, with proper cold emailing tactics you can outreach VCs far away from your network. VCs receive dozens of cold emails every day so just make sure your cold email stands out. Quality is always better than quantity so try to keep in mind the tips I mentioned in this article.