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How Founders Can Connect To Top Investors With Relationship-Led Outreach

You’ve done it! Your startup has found product-market fit, is hitting revenue goals, and has ever increasing user growth. In order to take things to the next level, it’s time to thank all of the angel investors that got you to where you are today, and consider a much larger fundraising round. 

However, in today’s fundraising climate, a cold email is just not going to cut it. Not only are investor inboxes filled to the brim with pitch decks, but according to a recent report from Crunchbase, venture capital funding for early stage startups is down 38% from this time last year. 

That’s why successful founders are increasingly leaning on relationship-led outreach to connect with top investors and get some valuable VC facetime to make their pitch. 

What is relationship-led outreach?

Relationship-led outreach builds off of the idea of relationship capital, an emerging trend with business leaders and knowledge workers. Relationship capital is the value of our networks that is created by building and maintaining relationships over time. Business leaders are consistently using relationship capital as a way to harness the power of their networks to reinvent core practices like go-to-market strategy, sales motions, and investor fundraising. 

In today’s business world as in much of history, people prefer to do business with people that they know, like, and trust. Especially when it comes to investing in an early stage startup where VCs will expect to be working very closely with founders. That’s why a cold email outreach to a VC firm won’t likely open any doors for you. Instead you need to lean on your trusted networks to make the outreach on your behalf to get that foot in the door. 

How do you find the right investors for your startup?

Finding the right investor for your startup isn’t as easy as pulling up OpenVC or Crunchbase and landing on the first firm you come across—and don’t expect A16Z to simply pick up the phone and give you a deal. Finding startup-investor fit is not unlike finding product-market fit. There are a lot of opportunities and options out there, but identifying the target audience who understands and is interested in what you are building is key. 

That’s why you need to put in the time doing some research before beginning your outreach. There are three key areas of research you need to look into when trying to find startup-investor fit:

  • Are they active? The first thing to look for (so that you don’t waste a lot of time on the next two steps) is to make sure that the firm has recently led and closed a seed or series fundraising round that aligns with your goals. Stay away from firms that have not led or closed recently because odds are that they may lack capital to invest in your startup, or are temporarily pausing funding rounds.
  • What do they invest in? Next look at the industries and solutions that they invest in. If you are building an AI product, then look for VC firms going all in on AI. But if they invest in renewable energy tech and you’re building HR software, well, then they sound more likely to hear your sales pitch instead of your funding pitch. Also, once you’ve found firms who are investing in your wheelhouse, make sure that they are not currently invested in any of your competitors as that could raise conflicts of interest.
  • Who are the partners? Finally, once you’ve found potential VC firms that have matched the criteria above, take a deep dive into the individual partners at the firm. Different partners often have varied specialties and areas of interest, so it’s best to take a look at their social media (and anywhere they’ve been published) to get a better sense of who you might have a stronger connection with. 

With a list of potential investors in hand, it’s time to take the next step–outreach. 

How can Hifive help connect you to investors?

Since so many founders and investors tend to run in the same industry circles, odds are that you already have people in your close network who might be friends with, former colleagues with, or have already received investments from someone on your list. Nevertheless, reaching out to a friend or colleague for a warm intro is still a big ask, which is why you want to make it as smooth and seamless as possible. 

That’s where Hifive is here to help.

Hifive makes it easy for you to begin your outreach with ready-made templates that are fully customizable to create a seamless investor referral request. Of course, we are living in the future so you could also sit back and let Hifive’s built-in AI get the ball rolling for you. Here’s how:

  1. With the Hifive Chrome extension installed in your browser, use the LinkedIn sales navigator to search for VC partners you’d like to connect with and then filter through your network to find common connections. 
  2. When you’ve narrowed down an individual to whom you’d like to help facilitate the introduction, click the “Get Intro” Hifive button.
  3. Hifive will provide an auto-populated message which can be tailored and customized for the referral request from your connection. Make the request even more compelling by including the following:
    1. Demonstrate your knowledge of the connection and why they would be a good investor for your business so that your requester feels confident vouching for you.
    2. Provide a brief summary of what your product or service does that can be passed along to the connection. We’re not talking about a long, drawn out and detailed explanation. Just the elevator pitch.
    3. Provide a link to your pitch deck so that the potential investor can learn more if they are interested.
  4. You can even make it easier for the person making the connection by customizing the message they’ll be sending for them.

If your connection request is accepted by you will both receive emails that the connection has been made. Hifive uses a double opt-in system, so both you and your connection have been verified and consent to the connection. 

Congratulations! Now it’s time to perfect that pitch.

Posted November 14, 2023