Thread by @Chris_Deutsch

Founders: ever wonder how to effectively reach out to potential investors, while radically increasing the odds that they convert to an investor in your startup?

A 🧵 on founder outreach to potential investors…what to do, what not to do and best practices that help EVERYONE win.

Although I’ve shared similar coaching on this topic before, this particular thread was inspired by a recent experience I had as a judge for an accelerator program, so I thought this would be a good opportunity to broach the topic again.

One of the most challenging aspects of fundraising is how to increase conversion w/investors. & one of the most frustrating aspects of being an investor is getting cookie-cutter, carpet-bombed spam from founders about startups that are totally off-thesis. So what to do about it?

After judging an accelerator’s pitch competition, I received outreach from all of the founders, which is great because follow up is key! However, they all gave me an obviously templated email saying they wanted to set up a time to chat and explore if we wanted to investment.

Given that I was super clear in my intro to the founders that I’m hyper-focused on Chicago startups and it’s plastered all over @LoftyVenture’s website, it doesn’t make sense for them all to reach out and ask this question without first doing some serious diligence on Lofty…

…and making an argument as to why we should make an exception for them.

Founders should resist the temptation to just blast a generic email to everyone that has the word “investor” associated w/their profile on LinkedIn. You want to be EXTREMELY thoughtful when reaching out…

to someone that could potentially invest in your company for several critical reasons: 1) you don’t want to waste your time if they respond and “show interest” but really never intend to invest, 2) waste their time by reading an email that should never have gone to them in…

…the first place, 3) if they really could be a good fit, showing that you took the time to be thoughtful/deliberate and highlight the *why* based on their specific thesis, and 4) investors talk with each other, so whether or not they invest, make a good impression…

…because you want them to say good things about you to other investors (I.e. “I passed because x but they were super thoughtful and thorough…”).

I also understand that fundraising is a numbers game and you have to share your startup with a lot of potential investors to get…

…some to actually back you and ultimately close your round. But with that said, you only have one chance to make that first impression with a potential investor, so to increase the chances that they either: a) invest now and/or b) invest later and/or c) say good things about…

you and your startup to their co-investors/friends, be thoughtful from the start and that usually means your first email, LinkedIn message, Twitter DM, etc.

So what does thoughtful outreach look like? First off, if at all possible, try to find a mutual connection…

…to said investor and ask for an intro. This will show both thoughtfulness and build a trust bridge that will give you a massive advantage over just cold outreach. Second, it’s ok (and smart) to write up a 2-3 paragraph description of your business/product, team, traction and…

round details that you can reuse in all outreach. However, you should ALWAYS start with a paragraph explaining WHY “We’re a good fit for your investment thesis because…” Yes, this takes a some amount of diligence on your part (say 3-5 mins on the investor’s website,…

…AngelList, LinkedIn, etc.) BUT this minimal amount of upfront time invested by founders will save time for everyone and radically increase the email-to-convo conversion ratio, and possibly subsequent investment. Again, fundraising is a numbers game, but it’s not just how many…

…you reach out to, it’s even more about your conversion ratios. And don’t just look at thesis but also stage. I can’t tell you how many times I get messages about B, C & later rounds when I say very explicitly that I’m a first-check to seed investor…and I promise all other…

…investors have the same experiences.

Lastly, let’s all remember that we’re all human, founders AND investors and we should be treating one another with enormous respect and consideration. That means being thoughtful with our initial outreach, how we handle ourselves…

…throughout the engagement and post-investment all the way up to exit…or especially in the unfortunate case of winding down the company. If we do treat one another with care and respect, we’ll all be a lot more successful and have a ton more fun doing it!

Feel free to share your thoughts at the end of this thread. Would love to have an open and productive conversation on this topic with founders and investors. Thanks for taking the time to read and engage with the community!

One more note, this thread is meant to help founders AND investors think about how we communicate with one another. I can’t force anyone to follow this advice but I guarantee those that internalize this will have more success and that’s my goal for our community. Good luck!