The first step to find venture capital is to make a smart introduction to the venture capital firm you’re interested in meeting.
Venture capitalists rely heavily on trusted connections to vet deals.
You’re not trying to contact as many people as possible; you’re trying to find venture capital firms that are the best possible fit for your deal. The more closely aligned you are with the needs of the venture firm, the more likely you’ll find venture capital firms willing to write you a check!
Every pitch to a venture capital firm starts with an introduction to someone at the firm. It helps to know the exact profile of a venture capitalist to know which level of introduction makes sense. Typically you’ll start with an introduction to an associate and then work your way up to the full partnership.
Most introductions these days come through email, so having the perfect email pitch is critical.
Take your time and do this right, because you won’t get a second shot at getting in the door. Entrepreneurs spend an inordinate amount of time crafting the right email intro, which includes a highly focused elevator pitch. This typically isn’t done quickly and it’s worth every moment you spend on it.
Do everything you can to avoid coming across like a salesperson.
Venture capitalists rely heavily on trusted connections to vet deals. These come from past entrepreneurs they’ve worked with, advisors at startup companies, and even other investors. The value of getting an introduction through one of their existing trusted connections is exponentially higher than going in cold.
That said, chances are you don’t know any venture capital firms personally. Most people don’t, so that’s no big surprise.
However you may find that you do in fact know people who could make the introduction for you. Try searching all of your social networks (both the online and the offline ones) to find out who you may know within each firm. You would be surprised at how many people may only be a contact or two away from making an introduction. One introduction can mean the difference between raising or not raising venture capital.
Assuming you can’t find any trusted connections to the venture capital firms you’d like to pitch, your next best alternative is to make the warmest possible introduction.
You’re looking for any connection you can make to the venture capitalist so that you can demonstrate you’ve done your homework and you’re not just sending out form letters. Look for any background you can find on what previous deals they may have done that relate to your pitch. Look for some recent press that they may have gotten that you can refer to. You just need to create a little bit of warmth and personality to what is otherwise a cold intro.
Showing that you’ve already done some of the homework will go a long way toward making sure you don’t wind up in the “deleted” folder.
Do everything you can to avoid coming across like a salesperson. You don’t need to “sell” the investor on wanting to make an investment. Phrases like “greatest investment opportunity” should be saved for scam artists. Instead, you’ll want to focus on explaining what your company does in as few sentences as possible. A good, short elevator pitch is far more impactful than a wordy and cheesy sales pitch.
Your first impulse may be to carpet bomb your entire target list to try to get as many responses as quickly as possible. Please don’t do this — it’s a horrible idea. Let us explain.
The most important part of reaching out to your contacts is the content of the response you get.
Contact each firm individually, with no more than three at once, and wait for real responses so that you can modify your pitch to future firms. The worst thing you can do is to burn up your entire list at once with the wrong introduction email only to find out you’ve exhausted all your best candidates with the wrong intro.
Depending on the quality of your elevator pitch and the quality of your introduction, you can reasonably expect to find venture capital firms will give you a quick “no” if they are not interested and a quick “yes” if they are interested in learning more.
VC firms don’t have a ton of time to waste on stringing you along, so if they are interested at all, they will most certainly invite you in to pitch.
Once you do get that invite, you’ll want to be fully prepared to respond. For that you’ll need your pitch materials, which we explain fully in “Pitching Venture Capital Firms.”