Effective Cold Emails
Tips for leveraging cold emails to get that first investor meeting.
We made it to fall! If you’re in the U.S., we hope you had a great Labor Day and are enjoying the short work week.
💭 Thought Bubble: Effective Cold Emails
Cold emails get a bad rap. It’s the tactic everyone cautions founders to avoid when fundraising. The reality, though, is that sometimes it’s your only option. If you find yourself in this position, don’t fret. When done well, cold emails can be an effective tool to connect with an investor, but it’s not as simple as compiling investor email addresses and doing a mail merge with a generic email.
I asked the same group of investors who contributed to the Aug. 25th newsletter for their advice on best practices for founders when cold emailing investors. Every person responded with a comment about how the email needed to be personalized to the investor and their firm. This means being very targeted. Sure, it can feel productive to blast an email to a list of 150 investors in an afternoon but resist the temptation to do so. Only email those where there is a very clear investment focus that overlaps with your business.
Cold emails with the highest chance for success take time to craft. The hard work begins once you’ve identified a (hopefully) small list of relevant investors. Personalization doesn’t just mean changing the salutation. The consensus across the investors I polled was that it's critical for founders to show how their business fits into the investor’s thesis and/or why it’s relevant to that specific firm. Howard Yu, who runs an angel group focused on investing outside of the Bay Area, recommends founders leverage different platforms, such as LinkedIn, X (Twitter), or Crunchbase, to get as many details as possible to help you sufficiently tailor your email. Another investor at a notable angel group in the Midwest suggested putting this context in the opening sentence of a cold email.
Becca Shmukler, Principal at Laerdal Million Lives Fund, and Howard Yu also stressed the importance of building credibility. As we’ve noted several times before, the team is heavily weighted in any early-stage investment decision, and it is helpful to have a sentence or two to describe why you're the right founder for your business. Becca noted that she actually prefers to receive cold inbounds through LinkedIn, because it makes establishing founder-market fit easier by enabling her to quickly look at the founder’s LinkedIn profile. Extrapolating from this, if you decide to go the email route, include a link to your and your team’s personal LinkedIn’s. Investors are going to look for this anyway and will appreciate that you saved them a step.
Once you’ve established credibility and relevance, you need to succinctly communicate what your business actually does. Katie Dunn, Angel Investor, Board Director, Startup Advisor, & Partner at Power To Pitch, and Maya Menon, Associate Partner at SeedtoB, echoed the importance of being concise. Don’t overwhelm the recipient with too much information. Focus on the most critical elements—the problem being solved, the company’s value proposition, traction, and details of the round.
You’ll want to conclude your email with a call to action, as Rohan Verma, Principal at Lewis and Clark Ventures recommends. Make it easy for the investor to follow up by sharing a scheduling link or specific times you’re available to meet.
Remember, the bar for a cold email is shockingly low. Becca mentioned this to me, and I wholeheartedly agree. Think about all of the cold emails you receive trying to get you to buy something that appears to be completely irrelevant to you. It’s no different for investors, just a different context. Cold emails get such a bad rap because they’re usually overutilized and executed poorly. Doing the work before you hit send will help you stand out from the hundreds of other cold inbounds an investor receives.
Lastly, a huge thank you to all of the investors who provided amazing feedback for the last two newsletters! I really appreciate your contributions and the ability to bring multiple perspectives to these topics.
👩💻 How to Pitch Me
TechCrunch interviewed fifteen investors to get their take on a multitude of market- and fundraising-related questions, including the types of businesses they’re looking to invest in, pitch tactics that no longer work, and questions founders should be asking potential investors. Reiterating how important being concise is, when asked whether she prefers pitch memos or completed decks, Marta Cruz, co-founder and managing partner, NXTP Ventures, said that she’s open to either, but “the key is to clearly and succinctly communicate the business’s value proposition, market opportunity, roadmap for growth, and, of course, the founder team information and what the startup is looking for.”
🏗️ How to Create a Great Startup Pitch
This X thread, which recaps a video by YC Partner Michael Seibel, discusses the two types of pitches every founder needs for their business, a 30-second pitch and a two-minute one. Any pitch longer than two-minutes is unnecessary. Investors want the pitch to be interactive. Chances are they’ve done their homework and have a couple of key questions that are critical for them to answer before they can even think about moving the opportunity forward in their pipeline. Let investors guide the conversation with their questions to avoid wasting precious time on areas that aren’t high priority for the investor at that point in their diligence. Bonus, this pitch framework is a great foundation to building a cold email.
💰 Tips for Raising Money for Your Startup
Crunchbase featured this guest post by Brad Pruente that highlighted six tips for successfully raising investment capital. One tip was to not ask VCs who passed for other investor introductions. Brad mentions this is because it evokes an unspoken question of “why aren’t you investing”. I agree with this to a point, but sometimes there is just binary criteria that an investor has; e.g., stage or geography, that will force them to pass no matter how much they like the business or team. Ideally, you should weed these investors out before you chat seriously with them about fundraising, but if you have investors you're friendly with that won’t invest because it’s outside of their focus areas, I don’t see the harm in asking them for recommendations on other investors that might be a better fit.
😴 Decompression Zone
One of my favorite activities is baking, and really, just cooking in general. I love trying new recipes; the methodical process of following a new recipe is almost like meditation for me. During the hot summer months, though, the last thing I want to do is turn on the oven, so my days of experimenting in the kitchen have been rather limited lately.
That changed this weekend when the unofficial end of summer and the slightly cooler temperatures gave me the baking bug. Needing to use up a rather large zucchini, I tried my hand at zucchini bread. The exact recipe I used is here, but I recommend using about 50% more spices than the recipe calls for and adding a couple of tablespoons of lemon juice. This is a great recipe as we transition from summer to fall and you’re craving warm fall spices but aren’t quite ready for pumpkin yet. Enjoy!
👋 Have a great end to your week!