How to approach investors?
“Should I seek an introduction, or find their LinkedIn profiles?’….. “If there’s an email, I’ll shoot my shot, or I’ll wait to see them at an event.”
This dilemma is something many of you have likely faced as well. While reading various articles on the subject, I’ve noticed differing insights among them, revealing a range of perspectives.
I reached out to 10 investors from prominent venture capital funds and a notable angel group to learn about their preferred ways of being approached. Grasping their approach is vital since some investors, owing to their hectic schedules, may not regularly check their LinkedIn profiles or might disregard approaches they perceive as less ‘serious’.
I asked seven simple yet crucial questions for your fundraising strategy.
Consider that insights from 10 investors don’t necessarily establish a universal approach, but they do shed light on the practices of some of Bulgaria’s well-known investors.
How do you prefer to be approached as an investor?
The options were:
a) Email
b) LinkedIn
c) Introduction by a mutual contact
d) Events/conferences
e) All of the above
f) Other
60% favor being introduced by a mutual contact, as it likely reduces the risk of wasted time. The rest were split between email (20%), LinkedIn (10%), and a combination of various methods including events and conferences (10%).
Are you open to informal and candid discussions with founders, or do you prefer a more formal approach?
The options were:
a) Informal and candid
b) Formal and structured
c) A mix of both, depending on the situation
60% of investors prefer an informal and candid approach. Can you imagine how many people approach them daily with a “Dear Mr/Mrs + Surname” followed by a four-page-long email? However, 30% of investors prefer ‘a mix of both, depending on the situation,’ while only 10% opt for a formal and structured approach.
My advice? Read the room and adapt accordingly. It turns out most of our investors are easy-going and prefer a more relaxed approach.
How do you typically handle founders who are not a suitable fit for your investment criteria?
The choices were:
a) Provide constructive feedback and decline the meeting
b) Politely decline the meeting without specific feedback
c) Ignore their messages or emails
d) Refer them to another investor or resource
70% provide feedback and decline the meeting. The other responses were equally distributed among the remaining options.
Do you prefer initial meetings to be held in person or virtually?
a) In person
b) Virtually
c) No preference
The responses were almost equally distributed among these options. 40% had no specific preference, 30% preferred virtual meetings, and the remaining 30% favored in-person meetings to ‘feel your energy.’
What is your preferred topic for follow-up meetings after the initial pitch?
a) More detailed pitch presentation
b) Deep dive into financials and projections
c) Discussion of growth strategies and milestones
d) Other
40% want to learn more about growth plans and milestones. 30% seek a more detailed presentation, and 20% focus on financials and projections. One investor said, “Depends on what was lacking in the first pitch.” You don’t go on a first date and talk about your red flags, right? That’s exactly why investors should be asking about the things that were missing.
How many follow-up meetings are typically required before making an investment decision?
a) None, decisions made after the initial pitch
b) 1–2 follow-up meetings
c) 3–4 follow-up meetings
d) More than 4 meetings
e) It varies based on the startup’s complexity and stage
40% need 3–4 meetings to decide, emphasizing the importance of understanding the business and team you’re investing in. However, one of our investors does jump into the ‘marriage’ right after the first meeting. 30% said it depends on the startup’s complexity and stage, and the remaining 20% were split between needing more than 4 meetings or only 1 or 2.
Do you provide feedback to founders if you decide not to invest?
a) Yes, always
b) Yes, if requested by the founder
c) No, not typically
d) Other
50% always provide feedback, 20% do so upon request, and one was honest enough to admit they don’t provide feedback. Saying no to 10 date requests per day must be harsh, but 20 percent said they try to, but not always manage to.
By gathering and analyzing these answers, I understood that there are some questions where we can definitely see traits and insights on how to approach investors. However, it is still a personal choice.
My recommendation to founders is to definitely seek an introduction through a common contact. This ensures not only that your pitch deck is noticed but also expedites the process of getting the investor’s attention.
Investors are very busy and receive numerous proposals daily across various platforms, so a trusted contact can significantly boost your chances. Be understanding and personable; investors appreciate brevity and directness. Share the essentials, send your deck, and propose a meeting without overwhelming them with information.
Remember, not receiving feedback or facing rejection is not personal. Investors often can’t provide detailed feedback to everyone. But with a legitimate product, you’re likely to receive constructive feedback even if the answer is no.
Initial meetings are based on personal preference. Due to their busy schedules, investors may opt for virtual meetings initially. If you do get an in-person meeting, respect their time and be as informative as possible within the allotted time.
Each VC has their approach to decision-making, and part of your job is to convince them of your value as quickly and effectively as possible.
