Investors are busy and can’t possibly have enough time to adequately evaluate every single new investment opportunity that crosses their inbox. Instead, they rely on signals to decide which potential deals are worth spending time on. The most powerful qualifier is a trusted introduction.
1. Getting organized
There are many SaaS tools to help you track your investment process and we’ve used most of them. Our favorite though remains this simple google sheet. It’s fast, free, mobile-friendly and easy to share with existing investors and friends. Use one thing and just stick with it. Your email inbox or “in your head” are viable options.
2. Identifying targets
List out each of the channels and the associated targets that could have investment interest in your business, which should look something like this:
- Recommendation from existing investors
- Recommendation from your personal network
- Other founders in your space who have already raised the round you are raising
- Subscribe to online databases (or ask your existing investors to share data) like Crunchbase, PitchBook, and CB Insights. Crunchbase is the best if you’re just picking one.
- Consider customers/business partners that could be strategic investors.
3. Securing introductions
A good introduction can dramatically increase your chances of successfully closing your round by 10x or more, so investing your time to get high-quality introductions is one of the most important things you can do during your fundraise.
After you’ve created your target list, rank them from most desired at the top to the least desired at the bottom. Share your target list with your network and ask them if they have a relationship with any of the investors on your list. Figure out how close of a relationship they have to each and choose the introduction from the person who has the closest relationship for each target on the list. Note, introductions from other CEOs/founders are more influential than introductions from other investors or your current investors.
References
Sample Investor Tracker (Gsheet)
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