Are you in fundraising mode and wondering how to cold email investors?
Want to raise more capital for your startup business? How can you successfully cold email investors and get the funding your venture craves?
Some startups and their founders have become famous for pulling off incredible funding rounds from very notable investors, with just a cold email. Even from Mark Cuban.
It is true that this is more the exception than the rule. Yet, if they could do it, so can you. There can actually be many advantages to this. It’s a great way to start fundraising and land a highly respected lead investor. While not necessarily the most efficient or predictable fundraising process, it is cheap and can help keep things simple when you don’t want to get distracted and detoured with a complex fundraising process. If you can pull it off, the upside and ROI is huge.
Also before you are even thinking about emailing investors you want to make sure that you have your fundraising story in place. Storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Here’s how to cold email investors and win the money…
Choosing The Right Investors
To be efficient and avoid wasting precious months and just banging your head against the wall, it pays to hone in on the best fitting investors.
When looking into how to cold email investors you need to get very targeted. Just like you would do with any customers. This will dramatically increase your odds of getting your emails opened, getting them to read, prompting a response, through to getting a meeting and closing the deal, so that you can put the money in the bank.
So, who are the right investors to email for your startup?
Some of the ways you may filter them include:
- Who is already investing in and interested in your industry and niche
- Who is excited about investing in your type of business model
- Who writes the size of the check you are looking for
- Who invests at this round and stage of startups
- Which investors and partners you’d really like on your board
- Who can offer your startup the most value beyond the money
- Whose fund is at the right moment in their lifecycle to match your timeline
- Who can you get along with and enjoy building a business with
How To Get Investors’ Email Addresses
Obviously, in order to be able to email your target investors, you have to have their email addresses. Where do you get them?
Some options when addressing how to cold email investors may include:
- Purchasing or renting email lists
- Having an assistant scrape email data from the web
- Finding investors on popular startup and investing platforms
- Reaching out through email promotions and lists managed by crowdfunding platforms
- Listening to podcasts like DealMakers where they give out their contact information
- Through schools and universities, they may lecture at as professors
- Through angel groups and associations
In the video below I cover in detail how to build a target list of investors that you may find interesting.
Key Parts Of Your Email To Investors
These are the key parts of crafting an email to potential investors in your startup.
The from address
Which email address will you email them from? Be careful that it isn’t some super spammy Yahoo or Hotmail address that will get blocked and bounced or ignored. It might be even better if it is an edu address, or from your new company domain. Worst case scenario, at least you start dropping your company name into their subconscious mind, even if they don’t open it.
The subject line
This is one of the most important parts of how to cold email investors as this will determine the open rate. Your email won’t get opened without a great subject line. It doesn’t matter how great the rest of your message or your business idea is if they don’t open the email. Create a compelling subject line that they can’t resist opening. Or at least one that peaks their interest enough to get a look.
The first line of your message
It’s quite likely they will see the first few words of your first line in their inbox as a preview before opening your message. This can be just as critical for getting opened as your subject line.
Once opened, your first line of text carries all the difference in whether they will keep reading or not. So, make it interesting and appealing.
The body of your email message
You might get read with a long from the message with a great story and lots of attachments. Today, we are all so busy, and great investors are certainly no exception to this. So, it makes sense that a short and sweet, on-point message will probably work best.
This also proves that you can stay focused and keep it simple. Two of the most important ingredients for a successful pitch and startup.
Remember that the real point here is not to close them in one single message. It is to start a conversation. Get them engaged enough to answer you back or pick up the phone.
You may use a video in the body of your message. Yet, especially with cold emails, attachments and embedded images and video may be more likely blocked by spam filters or avoided by recipients not wanting to fall prey to email scams.
The close and call to action
Be sure to end your email message with a clear and strong call to action. What do you want them to do? What is the optimal outcome, other than just wiring you some money?
Should they email, call, text, or reach you on social media?
Be sure to add all of your contact information so that they can reach out!
You can add more links to information about you and your startup in the signature area to build confidence too.
There are several angles you can take when wondering how to cold email investors.
Just raising your hand and saying “I want some money!” is probably not the most effective approach.
Others you may consider include:
- Asking for advice on your startup and pitch deck
- Surveying them on their business, investment thesis, and what they are passionate about
- Making a big claim that gets them interested
- FOMO – what are they missing out by not reading and acting on this?
- Referring them to content recently published about you or a big achievement or notable mention from an authority they trust
- Sending your pitch deck
Remember that even better than cold emails are introductions. Alternatives to cold emails may also include messages via Linkedin and Twitter or finding them in person. Get creative and show up where they are.
Once you get the investor to respond you need to get them past the introductory call. The slide below outlines how to go from one phase to another one. You need to treat this process as a sales funnel and moving investors from one place to another all the way until the money is wired in the bank.
While cold email investors is not the best way to go about getting in front of investors it could still be a channel if you can not find another alternative way. My personal recommendation to founders is to always seek an introduction from another entrepreneur that has received an investment from the investor you are looking to target in the last 6 to 12 months. Those are literally the best source of introductions.
Hopefully, this piece provided some perspective as you are looking into how to cold email investors.