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.
Warm Up a Cold Introduction
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’s 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.
No Sales Pitches
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.
No Carpet Bombing
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.
What to Expect Next
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 the next section “Pitching Venture Capital Firms”.