How to write the perfect intro email to VC investors.
I have to say that most founders have absolutely no chance of raising money, unless they change their strategy. Founders urgently need to stop spamming and take time to build a properly qualified investor pipeline. And their email intros should look something like this...
Having worked as a semi-professional investor, and done over 70 early-stage deals, I've read my fair share of intro emails. Most suck.
A recent experience
I recently posted a comment on a LinkedIn thread, explaining who we invest in, and stating that we're not a VC but a venture builder, which partners with experienced professionals, helping them to launch a business - as a cofounder, not an investor. I was amazed by the terrible quality of messages I received from nearly 100 founders, mostly in the UK.
It was not only an eye-opener into the sheer dross that most VCs have to sift through (VC's, I feel your pain!), but also showed me how many founders are falling at the very first hurdle. I'm sure there are many great companies that are failing to raise money, simply because of poor fundraising.
Honestly, based on this experience, I have to say that most of these founders (no, most founders) have absolutely no chance of raising money, unless they change their strategy. They urgently need to stop spamming and take time to build a properly qualified investor pipeline.
Founders - do your research, and start raising intelligently. You will stand out, I promise you. There's plenty of information out there about building investor pipelines, but you can find an overview of our process here.
Intro emails
It helps if you build relationships first, of course, but it's not essentials. As investors, we don't want to miss our chance to get into that amazing deal. So we read the emails we receive. But, we can't wait to delete them either. So capture our attention and our intrigue!
Intro emails should:
– Get you a meeting (not investment);
– Leave the investor wanting more information;
– Give cold, hard facts... proof not claims;
– Focus on what makes you and your idea special;
– Combine vision and traction;
– Yes, create FOMO!
Cold emails should be a teaser about what’s GREAT about the business. They are not a chance for you to tell your life story. Just get to the point - founders need to raise, and investors invest. We get it.
If Carlsberg could write intro emails, they’d look something like this:
“Hey [first name],
It looks like you make investments of [SIZE OF TYPICAL INVESTMENT] in fast-growing [TYPE OF STARTUPS] in [LOCATION]. We’ve built a [PRODUCT TYPE] to tackle the [SECTOR] market, which itself is growing at YY% CAGR per annum. We’ve reached $AAA in monthly revenue. This is increasing consistently at BB% week-on-week. Our CAC ($45) payback is <3 months, and we're on track to grow from 125 customers now to XXX by year-end. We’re raising [RAISE AMOUNT] to accelerate in [TARGET MARKETS]. I spoke with [FOUNDER] from [INVESTOR'S OTHER PORTFOLIO COMPANY]. They said you've added a lot of value via advice and introductions.
Can we talk sometime?”
What if you're pre-revenue?
I shared the wording above previously and was asked, "how do we talk about traction if we're pre-launch?!" Here's an alternative suggestion (yes, you can show traction pre-launch!):
“We’ve built a XXX to tackle a global market that itself is growing at YY% per annum. We’re pre-launch, but have signed AA LOIs and BB partnerships with companies including Big Name 1 and Big Name 2. To date we have a waiting list of ZZZZ users. If we can convert 50% of those to paying customers, we’ll reach $500k ARR. (We believe 50% is likely. Comments like, “I need this in my life”, and “Finally, someone’s building this” have been typical from our early user interviews.) Funding-wise, we believe we can reach profitability in our launch market without additional capital, but intend to raise again within 18 months to expand and scale. We grew and sold our last company using a similar playbook. Less than 50% of the round is now available, and our early investors include execs from Cool Company 1 & 2, and General Partners from two tier 1 VCs. I’m writing to you specifically because ZZZ told me you’d be a great investor to have in our corner. Would you be interested in a call?”
I hope it helps!
James
Image credits
– Pen photo by Art Lasovsky.
– Stressed out by your emails photo by Andrea Piacquadio.