Creating Your Investor Pipeline

I hope everyone is getting ready to enjoy the last summer weekend of the year.

Pumpkin spiced lattes, football, and spooky seasonal activities are all within sight.

As we close out the summer, many are starting to ramp up a very aggressive three month fundraising window that companies have before the holiday slowdown.

I have been asked for several investor introductions over the past month and there is a clear difference between prepared founders who ask for these introductions verse ones that don’t necessarily have a plan behind their ask.

When I was actively raising, I found building an investor pipeline to be tremendously helpful and I wanted to focus this week’s issue on the topic.

Where to start can be the most difficult part of fundraising especially when a majority of investors are not open to cold outreach.

But, if warm introductions are the key to finding your ideal investor matches, then building out the correct fundraising process and pipeline is going to be critical to your success.

I benefited from building out my investor pipeline by using this deck from Jenny Fielding.

I did not actively share it as much as this deck says to, but it did act as a place where I could keep my target investors organized and share it with people inside my network.

I have cleared out the template that I used and made it available to download HERE.

When I started building out my investor pipeline, I first began by subscribing to a free trial of Crunchbase. If you can get everything done in seven days, more power to you, but I did have to upgrade eventually because I found it extremely useful.

I would search for companies in our space and then see which investors participated in their round. You don’t want to target direct competitors since those investors will most likely pass due to a conflict of interest, but I was looking for investors in companies that played in the space at least.

Crunchbase also has a great search feature, so you can refine your search by stage and investment focus to build out lists of potential investors.

I would start by populating columns A through I until you get to 100-150 investors that you feel are a fit then you move to column J.

Column J is where you are going to use LinkedIn to find shared connections with people at the investment firm. You will click on the LinkedIn page for the firm, then go into people to see who works there, and then click on shared connections.

You will want to input multiple shared connections whenever possible, because although many people might show as connected, it might not be strong enough to warrant them introducing you, so you want to have multiple options.

The best warm introductions come from portfolio companies that those investors have already invested in.

With this in mind, you might also want to use the portfolio section of the investors website to populate column J with any founders you know who might be able to make the introduction.

I would allocate a full week or two to this process before kicking off your raise. It takes time, but creating a clear visual of all your target investors and the closest connections you have to them will make everything else move much faster.

Your outreach to shared connections asking for an introduction should be crafted in a way that makes it very easy for them to just pass along your email if they know that person well enough.

A good forwardable email has 1-2 lines with your ask to the shared connection, then a clear break, and then the introduction part of the email for the intended investor which should read like a cold outreach email.

This way the shared connection can simply hit forward, add a personal note, and not have do much more in order to help.

The cold outreach part of the email should be personalized for each investor. You will want to highlight why you think they are a fit, how you compare to other portfolio companies, and stay away from generic copy and paste language.

I would forego a deck, you want to send the deck once you have established contact.

As you move into meetings I would add tabs to separate your interested investors and the investors who have passed.

I found this exercise helpful and it also ensured I was being mindful of my networks time when I asked for introductions. It also ensured that after my raise that I had a robust email list of potential investors to send monthly updates to and nurture for future rounds.

If you are currently raising capital and looking to better understand the current investment landscape, we are hosting a roundtable discussion in September with a handful of top tier CPG investors.

You can sign up and attend for free HERE. 

I hope you all enjoy the holiday weekend and I will be back next week with another new issue.