Your Guide to Investor Outreach for Startup Fundraising

Why you need an investor outreach strategy

How effectively you build and execute on your investor outreach strategy will determine how your startup gets off the ground, survives and grows to the point of helping you achieve your vision. 

Looking to build your investor outreach strategy to raise meaningful capital to reach your business’ full potential?

Let’s get started.

The Guide to Investor Outreach

Know Thy Market

Just as with strategizing for a startup, start your fundraising by learning extensively about the marketplace. Look at the fundraising landscape and its ebb and flow. How bearish or bullish does it appear?

Who are the major players currently? Which of those are active? What kinds of terms are common and acceptable? How do the terms differ by industry, stage of funding and business model?

How is the capital distributed across locations? Where could you find your next or first round of capital? What kinds of investors are currently actively participating in a similar funding round? 

All this information will help you build a winning strategy from the ground up.

Learn About your Target Investors

This process resembles the research, analysis and discovery you do before marketing your product or service.

Gain information about the target organization and individuals you want to partner with.

Here are a few things you may want to find out about each potential investor-

  • The check sizes they have been issuing
  • The timeline of their fund and synergy
  • Their investment philosophy and beliefs
  • Their criteria and priorities
  • How other startups recommend them
  • Past successful and failed investments
  • Preferred communication methods
  • Their passions and interests
  • Their review- critiqued as well as recommended pitches

Create an Investor List 

Make a list of investors you’re interested in partnering with. Target them like you target customers. You may also want to have informal conversations with a few of these to learn about their inspirations and thoughts on investing.

Then, segment them based on industries they invest in, funding stage, past investments, area of focus and anything else you may want to factor in. Next, based on all the information gathered, number them on a priority of 1, 2, and 3.

Next, start reaching out to high-priority investors and building rapport with them.

Shortlist Channels for Investor Outreach

What are the best channels for you to get in touch with prospective investors? After completing the research on your investors, you may now have a fair idea of the lucrative channels of investor outreach for you.

These may include LinkedIn, Twitter, Facebook, Crunchbase, Email, Phone, Introductions, Crowdfunding platforms and in-person networking events.

Shortlist the most alluring platforms that may yield a high ROI for your investor outreach.

Create your Outreach Message

A good intake of strategy and psychology goes into crafting the outreach message for your prospective investors. Since you now know your high-priority investors well enough, we’ve made this step easier.

Yet, you may want to hire a professional to craft compelling messaging for your campaign since there isn’t much room here to be wrong. There are fewer investors than customers. So you want to ensure your message lands right with the chosen few in the first attempt.

Develop a storyline that consists of your team’s strengths, milestones and achievements, your vision and a clear roadmap to achieve it. These elements will form the foundation of your marketing campaign.

Build your Marketing Materials

Besides directly reaching out to investors, it’s advisable to carry out public marketing, branding and PR. Getting more visible never hurt a business. Your investor outreach strategy coupled with your marketing will keep you top-of-mind with prospective investors.

A few marketing channels include article distribution, blogging, press releases, social media advertising, PPC and outdoor advertising.

Create that Pitch Deck 

Too many entrepreneurs make easily avoidable mistakes with their pitch decks. Convince all viewers of the marketing opportunity. Integrate a demo of your product as part of the presentation.

Build on that storyline and messaging you crafted in the last few steps and demonstrate how you have already got early traction through paying customers or partners.

A few things to avoid include:

  • Deck size over 15 slides
  • Making it too wordy
  • An overuse of jargons and acronyms that may confuse investors 
  • Belittling or underestimating competition as part of the presentation.

Be mindful of the graphics and appearance of your pitch deck. Again, it’s advisable to outsource that part to design pros.

Create a Follow-up Discipline

Plan a follow-up routine to get in touch with investors who expressed interest and interacted with you. Keep these investors updated on all advancements in the campaign. Some of them may not be ready to invest today but may get around after seeing traction in your campaign. 

Create a monthly newsletter to share fundraising successes, product updates, lessons and calls-to-action.

Just like in any kind of selling, the money is in the follow-up.

Track and Measure Efforts

Since startups often work with limited resources, founders usually wear multiple hats. Therefore, it’s important to know how effective your efforts are. Use tools to help you measure and track actions.

Manage all contacts, notes and progress in one place using a CRM tool. Use an email marketing platform to design and send regular newsletters. Assign and track action items using tools such as Asana, Trello and more.

And finally, set reminders and notifications to keep track of to-dos and action items so that nothing falls through the cracks.

Measure email open and clickthrough rates and change the email messaging accordingly.

Have Conversations and Close

Get ready to take live meetings and pitch presentations. Be prepared to handle rejections and solidify your belief in your business and self. Even the best entrepreneurs face some rejection while fundraising.

Need support through fundraising or looking for software development for your startup? Talk to our team today!

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