You should always try and get an introduction to an investor. Without question, third party validation helps open the door. What do you do when there’s no one in your personal network that can introduce you to a key investor? Cold pitch.
Aaron Levie from Box got their first investment from cold pitching Mark Cuban.
We managed to get three angel investments for Twine from cold LinkedIn pitching.
11 tips for cold pitching
Here are a few notes from our cold pitching process:
1. It will only work with non-traditional angel investors or VC funds.
2. A VC’s job is to speak to startups but they are very busy. Patrick Mathieson, from Toba Capital, says it is possible but to treat it as a lead gen tool. There’s a great Quora on cold VC pitching. Be aware that at larger firms you’ll often get passed to someone junior.
3. I would define a non-traditional angel as someone that has done less than three angel investments or has only used a crowdfunding platform.
4. We’re lucky that all investors have been great for what we need. You could get an angel who is overbearing or doesn’t understand how investment rounds work, as they are not familiar with startups.
5. A cold pitch to an experienced angel will rarely work. They get inundated with pitches and will always prioritise introduction to maintain existing relationships. Always try and get an intro.
6. Your intro email should be short and concise. If you can mention a mutual contact, do it. This will carry some weight.
7. Don’t give up after the first email. Follow up up to two more times if you don’t get a reply. More people got back us on the second or third email.
8. Do some light social engagement if possible. Have they asked any questions on Twitter that you can answer? Retweet a post of theirs. Do they use Instagram?
9. As soon as you get their email address from LinkedIn, use email. This will enable you to send attachments, which is crucial for the follow ups. Also, you can use the first template below when connecting on LinkedIn (it allows you to customize the default message).
10. Your goal is to get a call or a meeting. If you need to qualify them, then you should push for a call (time is your enemy) otherwise get a meeting.
11. When you first meet in person or speak on the phone, make sure you build up rapport by asking them questions about their experience. Everyone loves talking about themselves. Then ask for their advice. Get their opinions on what you are doing. Then hit them with the FOMO.
Your initial email
We used one of two templates for the initial email. I would not recommend using ours verbatim, you should use it as a guide. The first one was to really push out the intrigue and get the initial conversation going. It worked once:
Hi [Their name], I hope you're well. I was hoping to connect to discuss my startup [Startup name]. It would be great to get your thoughts if you have 5 minutes. Kind regards, Stuart
The second template was a bit more in depth and worked twice. The key is to make this personal, so you should vary it:
Hi [Their name], My start-up, [Startup name], is a [Your one-liner]. We want to [What you do]. Our mission is to [Your mission / why this matters]. We're raising [$Amount] and are looking to close within [2 weeks]. I thought you would be a great fit because of your interest in ambitious companies and your experience [their expertise]. Would you be available for a call? Kind regards, Stuart
The follow ups
Your first follow up message can be really brief. We used this template and attached a PDF 1 page summary:
Hi [Their name], Just following up, it would be great to discuss [Startup name]. I've attached a 1 page document for more information. Kind regards, Stuart
Finally, our last follow up message varied as it was dependant on their response. But generally it followed this pattern:
Hi [Their name], Just following up. I've attached a 1 page document for more information. We've made great progress by recently [getting in an accelerator/winning an award/getting press]. We also now have over [one growth stat that sounds impressive]. It would be great to have a chat. Would you be available for a call? Kind regards, Stuart
I’ve since learned that “just following up” is a terrible phrase to use. You should try and build in knowledge about them, one of their investments, or something relevant to their job. For example, “I read your blog post on… It was really interesting and I definitely agree…” or “I read this news about… and thought it might interest you because of…”
If they are on vacation
If they are away, you can use a bit of FOMO:
Hi [Their name], Please get back in touch when you're back, we might be able to squeeze you in the round – certainly worth exploring when you're back. Have a good holiday. Kind regards, Stuart
But does cold pitching work?
Cold pitching is always a last resort so you should always try to get an introduction. Get to know more founders who could introduce you and ask them for an intro. If you have no other options, then of course you should cold pitch. It can work. It did for us three times.