Typing up an effective cold email requires some skills. The
majority of people have no idea how to properly format an
email to gain a response. If you manage to learn how to type a
fantastic cold email, you’ve placed yourself far ahead of the
competition.
For an entrepreneur who’s making a startup, emails are some of
the most powerful tools that can help gain funding. Most
people that launch a business are not immediately well
connected, this requires time and effort to develop a network.
Since you can’t simply dial your friend who is acquainted with
angel investors, you’re going to need a different approach to
pull this off. The main issue is that most angels that invest,
only like to deal with people that they either know or have
been referred to. So you need to make them come around and
like you from a single email. No need to worry, you can pull
this off.
Some people might say that cold emailing investors is a huge
waste of time, and instead, you should be spending that time
locating investors through shared connects and networking
events. I disagree with this notion.
In actuality, cold emailing potential investors isn’t that
difficult as it may seem. All you need to do is take a step
back and change the way you approach them. From the research
stage to the final call-to-action, every cold email you send
out is going to be focused on an accomplishing a single
action.
You want to enter the scope of an investor’s radar to set up a
conversation. For this article, we’ll be giving you some of
the best tips out there to start sending better cold emails to
angel investors immediately.
Do your research
Before you begin typing up an email to a potential angel
investor, there’s one vital step far too many entrepreneurs
tend to skip out on. The first step is what can take your cold
email from instant trash binning to an interesting open.
Researching your investor is a very important action to pull
off. If you don’t do a single act of research on the investor
you’re emailing, all you’re doing is shooting into the dark
and hoping to hit something.
Consider this: Without conducting any research, how do you
expect to know what they may want? If you can’t locate an
angle that will help engage them, they’re never going to be
interested in what you have to say. You need to understand
what the potential investor is interested in, what might make
them interested in you, and what unique angle you can take to
gain their attention.
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What companies have they invested in before?
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Are there any trends in their investment decisions?
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Do they invest in certain industries only?
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How much money do they typically invest in a company?
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What is the average valuation of the companies they
invest in?
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What topics are they tweeting and retweeting about?
Do not presume that all investors think the same. Take some
time to conduct your research on what this particular investor
is interested in and what’s more likely to entice them to hear
you out. Before you send any emails, take advantage of
platforms such as AngelList and LinkedIn to make sure your
startup is one they might have an interest in investing in.
Show them value in a single sentence
The subject part of the email is considered incredibly
important. You don’t want to ask for anything or beg for them
to open correspondence. Letting things remain simple will take
you much further and work wonders. When talking to an angel
investor the following is the subject line format that has
given some of the best responses.
Introducing [Company Name], [One line pitch]
You want to ensure they can get an idea of what your business
is all about. If you don’t have a single line pitch, then you
should take some time to think of one. It’s invaluable for
networking in the coming future. If it takes you more than 10
seconds to explain what your startup is all about, this is
already a negative sign. Show them what to expect when they
read through the email.
Tell them your reason for reaching out
First of all, don’t introduce yourself in the first line of
the email. Most people who send out cold emails will always
take the first line to say something like: “I’m etc etc, CEO
of the, etc company.”
In all honesty, no one truly cares who you are. Don’t take
this the wrong way, once you’ve managed to get the
conversation snowballing, they are going to care very much
about the type of person you are and the credentials under
your belt, but not at first. Think of it this way, if someone
went up to you and spent the first minute of the conversation
promoting themselves to you, you’d start getting annoyed with
them. And that something most angel investors tend to
experience, while people like to feel wanted, listening is the
main factor in a conversation.
This similar advice can be applied to cold emailing an
investor. The first sentence should tell them why you are
reaching to them specifically. Explain the reason why you are
cold emailing them, and not someone else. Make sure you select
your target for cold emails carefully; don’t just email every
investor whose email you can get your hands on. Email the ones
that can understand your business or industry to guarantee a
higher chance of success.
Summarize your startup
This is your time to shine. Take four sentences to talk about
what your startup is trying to accomplish. Using buzzwords is
fine as well, even if you do consider them to be stupid, but
showing the angel investor you know the industry inside and
out helps cement that you know what you’re talking about.
Three things you should make sure to touch upon:
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What is the problem?
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How does my company solve the problem?
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How do we make money/what’s our value?
For most people who are just beginning, you’re not going to
have much traction, which is fine. Just keep focusing on the
first two parts. Identify the problem, and then discuss how
the business manages to solve this issue. Talk about the
potential traction or the fact that you have a certain amount
of people signed up. Give them some reasons to consider
investing in your startup.
Tell them you’re worth it
This is the part where you are going to introduce not only
yourself but the company and its credentials. Let them know
about the fact that this isn’t your first time doing this. Or
explain to them why you have a deep understanding of your
industry. Another thing you can potentially include is the
fact that you went to a top university, throw that in if you
did. Are you from Seattle and you manage to help improve the
local community with your startup? Tell them you are
intimately acquainted with this area inside out. Has your
company managed to sell its products or services? Let them
know that it has.
When seeking out for angel investment, the person is number
one. Early investors like to see a competent team, not only a
good idea. The idea is that they invest in people themselves,
not the idea of the company. Whatever idea you may have will
most likely fail pretty badly unless there is great execution
backing it up. So you have to let the investors know that you
are not incompetent at this.
Remember, keep it short with two sentences maximum. One
sentence for each part.
Press mentions
Has your startup been featured on any well-regard publications
such as Business Insider, Forbes, TechCrunch? If so, be sure
to mention it, with a quick quote if you have any room left.
Media features will increase the credibility of your business.
Key stats and numbers
What kind of research-based evidence do you have to support
the industry you dabbling in, what you’re doing, and how well
are you performing in it? For example, if you are developing a
mobile app, show some numbers to explain why startups are
becoming mobile-first, like the fact that a major percentage
of the world’s population now owns a smartphone.
Call to action
It’s not completely possible for you to convince someone to
invest simply off your cold email. What you need to do is
schedule a meeting with the angel investor. While this may
seem like obvious advice, some angel investors have complained
about receiving tons of cold emails asking if they’ll invest.
The only thing you need to do is say something like, “what’s
the best way to discuss?”
Pitch deck
When it comes to attaching your pitch deck to a cold email,
there are two viewpoints most people will have on it. On one
hand, as the founder, you don’t want to come off as pushy and
send a deck without permission. On the other hand, attaching a
pitch deck allows the investor to have easy access to more
information on your company without having to request for it.
Just keep in mind that if you make them ask for your pitch
deck, all you’re doing is creating another reason for your
email to get trashed. Include your deck, let them skim through
it if they want to.
Use an email tracker
Finding out if your email has been opened can help you quite a
lot. There are tons of extensions you can use to track whether
your emails are being opened. Here’s a list of them:
This should help you decide on what cadence to follow up.
Don’t be afraid to follow up
Angel investors’ email inboxes will usually receive tons of
emails. It’s unlikely that an investor will even notice that
you sent them an email due to the number of messages they’ll
have to sort through. At a minimum, you can follow up within
the week if you haven’t heard a reply.
Conclusion
Cold emailing doesn’t have to be something incredibly
stressful to avoid at all costs. In reality, the more cold
emails you send out, the better you’ll get at doing so, and
the more results you’ll manage to garner.
Just keep in mind, you’re not going to gain the attention of
every angel investor through your email, and that’s perfectly
fine. The important thing is that you do your research
beforehand to ensure you’re only emailing the investors who
are most likely to be interested in what you’re doing and then
concentrate on setting up that conversation.