By Pranav Sanghvi | 15 May 2024
I promise, the title is not clickbait. Instead, it's a precursor to exploring potential obstacles in your fundraising journey. This article will discuss why taking a moment to pause and reassess your approach to engaging with investors could significantly impact your success.
As an early-stage tech investor, I often find myself in a unique (and blessed) position where a plethora of early-stage founders reach out to me with innovative ideas fueled by ambitious dreams. However, in their rush to connect, many overlook a critical step - doing their homework. This often results in communications that lack personalisation and depth. Before we dive into the importance of tailored communication, let’s address a fundamental aspect of investor-founder dynamics: the need for thorough research prior to reaching out to an investor.
Does the investor align with the stage and sector of your business? How can you optimise your outreach strategy? Is it a LinkedIn message or a warm introduction that holds more weight? These questions are pivotal in navigating the investor landscape effectively to secure a meaningful connection that may help propel your startup towards higher chances of funding (I must reinstate though – eventually it all boils down to one’s perspective of your business and its alignment with that respective Fund).
It’s common to see founders enthusiastically jump into pitching investors without first ensuring alignment. Knowing whether an investor's focus aligns with your business stage and sector is crucial for crafting a pitch that truly resonates.
Before you reach out, take the time to understand a potential investor’s portfolio, investment thesis, and industry preferences. Jumping in without confirming a fundamental match can lead to wasted efforts. For example, at Merak Ventures, we specialise in B2B tech. If you’re aiming to be the next big consumer brand, this bit of intel suggests you might find a better fit - and a more enthusiastic audience - elsewhere.
How does one get clarity on these aspects? Every investor, across their digital presence, outlines their sectors of preferences, stages and more importantly, drops hints at sectors/areas that might not be of their interest. It is easy to join the dots and gauge investor-business match. This exercise not only demonstrates your commitment but also enables you to tailor your pitch to align with the investor’s interests, increasing the likelihood of a positive response.
Moving forward, you'll find tremendous value in crafting tailored outreach strategies. The way you communicate with investors can greatly influence whether you make a lasting impression or fail to capture attention. While LinkedIn messages offer a direct line - I do my best to respond promptly - at Merak Ventures, we prefer emails sent to <investments@merakventures.com>. However, nothing beats a warm introduction through mutual connections, which can add a personal touch and boost your credibility. Do you have someone within my network? If so, leveraging that connection might be your best approach. The effectiveness of your outreach strategy will depend on your network, the investor’s preferences and the level of personalisation you can achieve.
Integrating in-depth research with personalised outreach can transform your investor communications. This strategy aligns your pitch with investor interests and builds foundational relationships rooted in mutual understanding and trust. These connections go beyond mere transactions, laying the groundwork for enduring partnerships that extend well beyond the initial funding round.
Specifically, about our fund at Merak Ventures, here’s the inside scoop: We’re a B2B tech VC firm. If you’re building a pet food brand or something in consumer tech, we might not be the best fit. We love to jump in early in the game, at the beginning of a business journey. And yes, while we respect the effort you put into your investor deck, we also value our time, so ensure it’s something that would genuinely pique our interest.
And about getting my name wrong? Well, it might seem minor, but it projects lack of attention to detail, which is crucial in the game. It is of paramount importance to ensure correct personalisation in your communication, the absence of which could prove detrimental very early on in the conversation. Like my friend, Sreya, our Director of Brand & Communications, always says, “It’s the little things that make a big difference”.
So, wrapping this up, remember that getting investors to partner with your business is more than just flashing a pitch deck. It’s about building a real connection, understanding what your investor is looking for, and tailoring your approach accordingly. So, before you hit “send” the next time, double check everything – right down to getting the name right. It could very well turn a potential miss into a major win.