Cold Call Fundraising
Fundraising is a tough business. You typically have to endure a lot of “no’s” or no responses before getting to that one “yes.” When reaching out to potential investors you don’t personally know (“cold calls”) proper preparation, creating a concise and relevant message, leveraging personal relationships, and getting high quality “warm” introductions can be enormously helpful.
There’s nothing wrong with cold calls as part of your fundraising efforts, but here’s a perfect example of the type of email one should NOT send:
We all have to deal with tons of spam, including advertising from any company we’ve ever clicked on, follow up surveys from every company with which we’ve ever done business, political ads, and other unsolicited requests for donations to help various causes (some legitimate and worthy, and others scams). So here are a few pieces of advice when cold-calling on potential investors via email. I’m trying to be genuinely helpful here, so apologies in advance if any of this sounds a bit blunt.
The email shown above was sent using a list serve, with no attempt at customization. It would be much better to send a short personal email, and send it from a business account. Don’t blast it to a listserv, or bcc me on a batch email. Keep it concise and get right to the point. Part of the letter can be a template. That’s fine. It may help to get your core story tight, in 1 or 2 paragraphs. However, you should add something personal besides my name. Also, when inserting my name, make sure you have taken the time to proof read my name! Messages that start “Dear Rose” create an immediate poor impression.
In the case shown above there was no attempt to even understand what I do, where my investment focus is, and whether or not this is a good fit. Do some background research: fund’s focus, portfolio, when they last raised, typical investment stage and size, leader or follower, interests of specific partners, etc. Make sure your opportunity will be of interest or resonate in some way with the partner you are reaching out to.
The most disturbing part of the letter above is that this person outright lies about having spoken with me previously. We never did. Don’t ever try to start a relationship with a lie - especially an obvious one. Does she really think I wouldn’t recall having spoken with her - and if so, I would still be interested in investing?
She further embarrasses herself by needlessly telling me that she’s already let her partners down by not having the update they requested. This may be an attempt to get my sympathy, which is another poorly chosen tactic. Instead it gave me the first impression that she’s a poor performer. The whole tone of the email is negative. She says she assumes there’s likely no point in continuing the conversation (which hasn’t even been started, in reality). You have to be upbeat and optimistic in tone.
The writer provides four links to documents that make perfect sense to send to someone who is seriously interested (teaser, pitch deck, business plan, financials). This would be good if preceded by a credible introduction. However, the nature of the email makes one wonder if this is a phishing scam, and just trying to get me to click on the link - so I won’t.
If you’re going to send any kind of additional material, please keep it short. A 1-2 page “teaser” executive summary would be best. Or a short pitch deck. Better yet, as a first step, just give me a URL address or a company name I can Google. Then I can look at your website without clicking on a link. Offer to send me the other info if I’m interested.
If it turns out that I am interested, the first thing I’m going to do is a Google search to see what additional information comes up on you and your company. You should anticipate this. Make sure your online presence is supportive of whatever message you’re trying to convey. Update any sites you may have, whether they be company websites or LinkedIn pages.
The second thing I’m going to do, if I’m still interested, is try to find someone independent that I know and trust who might know somebody involved with your venture in some way. This is why getting warm introductions from people who know you and know me is so important. It bypasses this step, and gives me some level of immediate comfort that it’s at least worth taking the time to look further. Take a look at my portfolio companies, or my LinkedIn page, to see if there is any common connection we have at all.
Early stage fundraising without a track record or an established network is really tough. You may have no choice, but at least try to do your homework, make your first impression as professional and clear as you possibly can, be upbeat and optimistic in tone, and try to find some common ground as a basis for discussion. And ideally, find a person who can provide a warm introduction. Good luck!