How to Leverage Connections to Raise Capital for Your Startup

Raising funds for your startup is a process, and it isn’t going to happen all at once. It's crucial to utilize the allies in your own startup community.

April 13th, 2015   |    By: Mike Belsito    |    Tags: Networking

The following post is an excerpt is from Chapter 10 of the book Startup Seed Funding for the Rest of Us: How to Raise $1 Million for Your Startup – Even Outside of Silicon Valley, by Mike Belsito. This chapter focuses on the steps that people can take to build up their network, even if they don’t already have a strong set of connections within the venture community. Using tools available to everybody along with a little bit of hustle, any entrepreneur can build a strong network.

Some people quickly dismiss the idea of raising capital for their startup because of a saying that they’ve heard time and time again: “It’s all about who you know.” They make excuses such as:

“I’m not that well connected, I don’t even know any investors.”

“I don’t have rich friends and family.”

“This isn’t Silicon Valley. There aren’t investors everywhere you turn.”

While it’s true that raising capital for your startup will require investors and those investors simply aren’t going to reach out to you and hand over a check unsolicited, it’s not the case that you have to be super well connected or move your company to the Bay Area to find investors for your startup.

At eFuneral, over 2/3 of the total funds we raised came from sources who we did not know prior to starting eFuneral. We did leverage our personal networks to raise 1/3 of what we raised, but the bulk of the funds came from connections we made on our own through networking and, essentially, cold-calling.

In order for you to cultivate a supportive group of investors, there are a few things you can do right now:

Keep your allies (and other people you know) engaged.

For those of you who already have great mentors in your life, this is usually the best place to start. Having a stable of helpful allies is critical as you go through this process. Once you begin to engage with this group, you should see their level of excitement over your concept grow. If you don’t, you may want to pause and understand why. After all, these are the people that have a personal interest in you and should genuinely want to help. If they don’t seem that excited about your business, probe to find out why. They could have critical feedback that you need to hear.

Let’s assume that their enthusiasm levels are very high. What should you do next?

First, keep in mind that these allies could make for ideal first investors. We’ll discuss later on how you may be able to go about asking for that first dollar of investment from this particular group.

These allies can be critical in introducing you to the right people within your own startup community. However, it’s important to know how to ask for an introduction. It’s likely your allies are successful businesspeople in their own right, which usually means that they’re constantly on the go, with busy schedules, and much on their minds. Know that you’re competing with other people and tasks for their “mind share.” Because your company is most likely not on their mind 100% of the time, you’ll need to help them help you.

Rather than asking them, “Do you know any investors I should talk to?” do the legwork yourself and ask them to connect you to specific individuals. There are a couple of great resources that you can use to help you when you’re doing this legwork:


AngelList is an online portal that allows startups to engage virtually with potential investors. AngelList has become a popular place for investors to list their current and prior investments, and to share information about themselves. Currently, this tool seems to be more popular inside of Silicon Valley, however, investors outside of Silicon Valley are beginning to use the platform in increasing numbers. I suggest that you make a list of those investors that hold a place on your “Dream Team.” While it’s pretty easy to reach out directly through the AngelList platform, don’t – at least not quite yet.


Crunchbase is a free website that profiles startups as well as their investors. When using Crunchbase, search specifically for the startups that are located in your area (no matter what type of business) – as well as startups that operate in the same general industry as your startup. Local startups often raise money from local investors, and those investors are often looking for the next hot local startup to invest in.

Don’t limit yourself to raising capital only from local investors. Investors who are interested in your specific type of business are located everywhere, and you should figure out how to connect with them using the tools you have at your disposal. Investors very familiar with your industry can be tricky, though. On one hand, you know that they’re interested in the type of business you’re building. On the other hand, information that you share with them could get back to another company they’ve invested in within that category, so you need to be careful with the type of information you disclose. 

Local Angel Investor Networks

Research local angel investor networks to find out who their members are. Angel investor networks work in a couple of different ways. Some have committed funds that make investments on behalf of their members, while others act as a source of deal flow and due diligence for a group of active angel investors who ultimately make their own investment decisions. While you can engage with the angel investor group as a whole (and we’ll discuss this later), try to find the member list of the particular angel investor group in your area so you can research these individuals’ specific backgrounds.


LinkedIn is a great tool you can use to determine if your allies – or anybody else in your network – are connected your “Dream Team” investor group. The first (and simplest) thing you can do is search for specific individual investors. You can do this with investor names you’ve compiled from sources like AngelList, Crunchbase, and angel investor group member lists – along with anybody else that you want on your “Dream Team.” Once you’ve found a particular LinkedIn profile page, you can check to see if you have any second-level connections. If you do, then you can engage with your mentor, ally, or whoever else that’s connected with this individual and ask them for a personal introduction. Another way you can use LinkedIn is to simply search for the term “Investor” as a keyword within the Advanced Search settings. You can customize your search further by location (using the keyword “Investor” and inputting your local zip code) or by adding other keywords that are relevant to your startup (to find market or function-oriented investors).

Have you identified potential investors, but can’t find any mutual connections that could provide an introduction?

Behold the cold call (and make it a bit warmer).

Cold calling is known to send shivers up the spines of those who don’t consider themselves to be skilled at networking. In sales, especially, cold calling is brutal but necessary. When trying to attract investment for your startup – cold calling is also often a necessary process. But it’s not something that you should be scared of. And quite often, it doesn’t even involve an actual call.

Social media can make a cold call a little bit warmer. Raising funds for your startup is a process, and it isn’t going to happen all at once. Now that you’ve identified your target investor list, you can start by engaging with them on social media channels like Twitter. Participate in conversations that they’re having. Answer questions that they post. Comment on posts that they make within their blog (if they have one). Your first communication with them shouldn’t be to ask for investment. Let them get to know you a bit – even if it is in a small way. Then, when you’re ready to have an introductory conversation with them, you can send a well-crafted email. If they’re at least somewhat familiar with you, you’re much more likely to receive a response back.

In our particular case, David Cohen, Founder and CEO of Techstars, performed fairly extensive due diligence on eFuneral. Many entrepreneurs and technology investors are quite familiar with David and his successful investments. However, we had no direct connection to David. Despite that, we had a series of emails and phone calls with him, getting feedback about our business as he was doing his due diligence. Ultimately, he chose not to invest. But the time we spent with him turned into the start of a relationship – and is one of the reasons why David agreed to be featured in this book!

How did it all start? One single tweet.

Of course, it wasn’t really just one tweet. I had engaged with him via Twitter several times, often receiving responses back immediately. After several weeks, I finally asked if he would be interested in reviewing our demo. He then invited me to email him directly and set up time to talk via his assistant.

If I had not taken the time to engage with David on social media for several weeks, would he have accepted my cold email and reviewed my demo? Possibly – but the odds were a lot lower. Yet, because David had some familiarity with me, it increased my chances and led to the conversations we ultimately had.

Shake some hands.

Utilize the allies in your own startup community. As you’ve already begun to build connections in your startup community (as discussed in Chapter Three) – leverage them. Consider other startup founders who are fundraising to be allies as well. You might be surprised by which connections you have actually lead to other helpful connections. After all, when it comes to finding investors for your startup, it’s always best to leave no stone unturned. The connection to your next investor might come from an unexpected, unlikely place.

About the Author, Mike Belsito

Currently: Author of “Startup Seed Funding for the Rest of Us; Product + Strategy @ Movable; EIR for City of Lakewood, Ohio

Formerly: Co-Founder of eFuneral; Employee #1 at Findaway World; Co-Creator of Appstand

What to read next:

How to get Customers for Startups

How to Find Investors

About the Author

Mike Belsito

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