List – Build a list of investors that invest in companies like yours. Find a friend with PitchBook or pay for CrunchBase. Too many entrepreneurs go after investors that don’t invest in companies that look like theirs or angels that aren’t active.
Targets – One by one through the list, see who you can get a warm intro to, attend an event they will be at, or last option cold email.
The ask – Going to investors before you’re ready to raise shows you have self-awareness that you’re not ready. Many entrepreneurs try and raise when they’re not ready. It also gives you a much smaller ask for the VC. You’re not saying “please invest in my company”, you’re asking “hey, do you mind if I send you occasional email updates as we move towards a raise”.
The content – Roughly once a month you should send an email update to each target. The email should include the bullet point highlights of what you’ve achieved and why your company is more mature (valuable) than the last email. This shows your ability to make incremental progress towards the big goal. Many founders don’t seem to make progress month on month. Also in bullet-point, include one to three goals you will achieve by the next email update. This cadence of emails is intended to show you are a founder that does what you say you’re going to do. Many founders don’t. At the bottom of the email, include a specific ask for support if you have one. Investors-advisors often want to help but aren’t going to spend time thinking how best to support your business. Be specific with your ask e.g. “We’re looking for an introduction to a Fortune 100 Security Officer”.
Add a record of these emails to your data room for the benefit of new recipients.
These steps will allow you to build a relationship with an investor and demonstrate your ability to build a company.
How to build momentum with VCs pre-raise was originally published in Osney Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.