Venture Capital Investors


Chapter Four

How to Contact Investors Cold



In many cases, people usually find investors through networking, connections with colleagues, friends, or other business partners. It does not have to be that difficult, however. You can also contact an investor cold. In the past, it could take a long time to find the right investor for your company. You need to look at several things before choosing to contact an investor cold. The first thing is his industry preference. You want to make sure that an investor’s industry preference matches the industry your business is in. The second thing you need to look at is at the investor’s stage preferences. Investors and investment firms are different. Venture capitalists, for example, have early stage preferences. Many VCs prefer to invest in a company in its early stages, primarily in series A or B. Some VCs may even invest in seed capital as well. Likewise, other investors who deal in private equity prefer to invest in an expanding company and needs capital for growth. Yet, others provide special capital, known as mezzanine capital, which is capital that bridges gaps a company experiences when it prepares for an IPO or initial public offering. A company prepares for an IPO, which means that it is preparing to be publicly traded on the stock exchange.

Contacting investors cold can be done, but you need some good marketing skills to do it successfully. The point is that you need to sell your venture to the investor to get him interested. There are several ways to do this.

Writing a Teaser Email

One of the best ways to get an investor’s attention, when contacting him cold is to send him a teaser email. Think about a teaser email like it is a sales letter. You are actually selling your venture to an investor. There are several things that you want to mention to an investor in a teaser email.

The first thing you want to mention is what your company does. What kind of product or service your company provides. Also, you don’t want to waste your time with sending a teaser to any investor. You want to do a preliminary search to see if an investor you are contacting invests in your industry and stage. You can do this with different investor database, such as our VCgate Funding Sources Database, which can help you search for the right investor. This can help you with your teaser email and narrow down the number of investors you want to send an email to.

How to Build Rapport with an Investor

In the same way in which you are making a sale and you need to build a good rapport with your customers, the same thing applies when you meet an investor. Contacting an investor cold should first be done with a teaser email, but if an investor is interested in your venture, he will contact you either via an email or by giving you a phone call. Investors can also give you their contact information, from which you can get their phone number and call them. This can be a great opportunity to build rapport with an investor. Why is this so important? Well, investors will invest in those people whom they like.

Rapport building is exactly what is mentioned above. You want to have a good rapport with a prospective investor. Get him to like you! Start by having a light conversation with him! Many people often open up when you ask them how they’re doing and having a small informal conversation. Once you see that you have their trust, you can get down to business. Building rapport can do wonders in helping you get the funding you need for your venture.




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