Unlocking VC Doors: Why Well-Crafted Cold Emails Trump Warm Introductions in the Startup Landscape
Venture capitalists often form a small, exclusive group that only grants entry to those who have been introduced by a known member. I find this practice unfavorable and do not believe it is the best approach for our profession.
After thinking a lot about the whole VC scene and how everyone’s always pushing for warm intros, I needed to clear the air. I’ve been a firm believer in the magic of a well-crafted cold email for a while now — going against the usual advice. In this quick read, I want to break down the hype and highlight why cold emails matter in the startup game.
Everyone talks about the importance of warm introductions to VCs and why those are the only way to get their attention. In a recent AMA from a16z, Marc Andreessen and Ben Horovitz restated that getting the right way to contact a VC is “a test of entrepreneurship”—and warm introductions are the right way, in their opinion. Of course, if you can get into a VC inbox warmly introduced by a person the VC trusts and respects, you should go for it. Warm introductions are the most reasonable way to establish a relationship with investors but are not the only one and, for sure, not the most common.
Although I value Marc and Ben very much, and Marc, in particular, is one of the main reasons I’ve been in the internet business since the 90s, I respectfully disagree.
Ask yourself: How many great opportunities would have been missed if warm introductions were the only way to get the attention of VCs?
In this article, I will present three reasons why being open to well-done cold emails is by far the best way to discover hidden gems.
#1 — Entrepreneurs’ unique power we invest in is their ability to build and deliver
Entrepreneurs should invest their time building a product and talking to prospective customers, not discover ways to get a warm introduction to a VC. Getting known and connected to valuable people in the investment space is a competitive advantage, but not more important than creating those unique artifacts that distinguish their work from everybody else’s. As investors, all we want is for them to fully commit to spending all their time making their companies great and finding paths to warm intros is a waste of this limited resource. Of course, they usually need VC money to help the team overcome specific stages of product and company building in which their own revenue cannot sustain the operation expenses. But then again, we love to be part of their journey because of their ability to build and deliver on promises, and fundraising should be a smooth experience, not an SAT. Fundraising is just one of the many things they need to master, but raising capital can be challenging, especially in the very first days. I enjoy receiving unexpected emails with impressive team and work presentations as it shows that our VC firm is establishing organic solid brand awareness.
#2 — Great entrepreneurs are everywhere
Building a solid network of clever people is always essential, but we cannot be limited by our ability to reach talents through our existing network of connections. A few years ago, building your network meant solely going out of the office and being present at in-person events. Now, things have changed significantly, not just because of the pandemic. Even if in-person meetings are pleasant and, most of the time, more satisfactory, managing every relationship online is definitely more efficient and helps us scale our circle of connections way faster than hanging out with people. Great entrepreneurs are everywhere, and only a tiny portion of them are already connected to VCs — or can find ways to get introduced to VCs. Why should they? If they are first-time entrepreneurs — who we love more than anybody else — they are usually just out of college, with a few internships done in the summer. They are at the peak of their entrepreneurial potential, and there is no reason why we should not get connected just because they don’t know how to get a warm introduction to our team.
As a VC, deciding to base your deal flow only on warm intros is simply anachronistic. It may be acceptable 20 years ago, before Y Combinator — just to be precise. YC has made it possible for anyone to have access to investors, regardless of their background, social status, or “circle of trust.”
#3 — VCs should be the ones reaching out to startups
Startups shouldn’t have to chase VCs. It should be the other way around. VCs should be the ones knocking on the doors of startups, and the best way to do it in a VC cottage industry is to leave your door open. That’s our job to find fresh and exciting opportunities to be the first check in a newly born company. All we should teach those who want to submit their idea to our team is:
- Please do it in a way that can maximize our throughput, which leads to a faster decision process. At Lombardstreet Ventures, we have found that a simple structured email is most effective, as we explain here. That allows us to get to the final decision within days.
- Please do your homework before sending us the wrong email. It means looking at our website and knowing what we invest in, doing your due diligence on us, and understanding our story and portfolio of past investments.
That’s it.
In a world where extraordinary founders are waiting to be discovered, let’s reshape the narrative. Cold emails are not just an alternative; they are the key to unlocking hidden potential. So, entrepreneurs, take charge of your destiny, and VCs, leave those doors wide open.
At Lombardstreet Ventures, we eagerly await the next wave of innovation to hit our inbox
To make this process seamless, we’ve outlined straightforward guidelines on our FAQ page. Craft a structured email that maximizes our throughput, facilitating a faster decision-making process. Before reaching out, do your homework — understand our focus areas, delve into our portfolio, and resonate with our journey. We believe that extraordinary founders come from everywhere, and it’s our commitment to leave the door open for them.
