Sourcing Your Lead Investor

It is very important to have a lead investor backing you in a fundraising round. He/she establishes trust and conviction behind the capabilities of the leadership team and acts as a catalyst for other investors to source in money and establish strategic connections for your business.

You find a lead investor by targeting your list of ideal leads, based on who is close to the kind of work you are doing, or is passionate about similar ideas. You can then go methodically going about meeting each of them, and forming good relationship with each. Believe us, no one in this digital world is beyond your reach. You can use the six degrees of separation principle with your friends and colleagues to get to each investor on your list. If you’re not sure who would make a good lead investor, ask your stakeholders who they recommend. Then use LinkedIn to figure out who can make introductions.

Target ten potential lead investors and don’t stop until you meet all of them (or find suitable substitutes). Ideally, you want ten conversations going about your company with potential lead investors. Your goal here is simply to form a good relationship without the pressure of pitching them to invest now. Tell them that you are not currently fundraising but want to be prepared. In return for their valuable time/advice, you will give them first look before you open your round. Even if none of your list ends up becoming your lead investor, you will have ten powerful allies. They may end up investing in a later round, or introducing you to colleagues who are a better fit for you as an investor now. These connections will help you go a long way!

Share your plans for the company, and specifically what you are doing between now and when you do open your round. Make sure whatever you tell them, you work hard to do it. Then report back to them on your progress, even if you fail to meet your goals. Investors look for founders who show this type of transparency and followthrough.