7 Steps to Building Investor Relationships

After closing a $20M Series A, a start-up founder and I looked back at the long process to reflect on what we learned and how we changed the way we approach investors today.

Like most people, we started by narrowing down a long list of venture investors, then contacting them with cold emails as well as asking for introductions from our network. We were ignored or rejected a lot. Sometimes, we received feedback that we used to refine our pitch. Mostly, we heard nothing. In order to pitch well, you need repetition. There are no short-cuts. To do that, you need to get meetings. We didn’t get many.

Where we went wrong was how and who we approached. We mistakenly believed that we would get an investment within months of first contact, and we focused too much on the firm instead of the people. People make decisions, not firms. In order to get a firm to invest in you, you need an internal advocate. Without one, you will never secure investment.

Here are the 7 Steps we now use to build investor relationships:

Step 1: Start at the firm level. Make sure the firm invests in your space, round and size.

Step 2: Look at the firm’s portfolio of investments to find close matches to your company.

Step 3: Find the people that manage those investments for the firm. Sometimes they hold

Board seats or are Board advisors.

Step 4: Once you zero-in on your short-list of contacts, research their backgrounds, read their articles, listen to their podcasts and build an understanding of their potential interest in your space.

Step 5: Reach out with a thoughtful note referencing their relevant investments or quotes from their articles and podcasts. Don’t ask for a meeting, just ask if they will take the time to review your deck. If they’re interested are reviewing your deck, follow up to get a meeting.

Step 6: If you do get a chance to present your proposal, but they pass, ask them for their reasons. Most won’t tell you, but some will. Either way, ask them if they’d like to hear about your future progress.

Step 7: If they say “yes” to future contact, follow up.

Even venture investors are cautious. Prove to them, over a long period of time, that you are professional, that you do what you say, and that your business is progressing. Investors are people. People invest in those they trust, and trust is built over time.