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How to find investors for your startup

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I’m often asked to make introductions to investors, and the flow normally goes like this.

Startup: “We’re ready to raise money.  Can you make introductions to investors?”

Me: “What investors do you want to meet?  Why are they a good fit for your startup?”

Startup: “…”

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In all seriousness, it’s very common for entrepreneurs to forget that investors have areas of focus, and the more they can target their potential investor pool, the better.  It shows investors that you’re thorough, and increases the chance that your eventual investors can help you, because they’ve seen your industry before, they have relevant connections (other investors that like your space; bus dev partners; interested acquirers), and obviously have a deeper passion for what you’re doing.

Some ideas for how you do this:

  • Go to a white board and list your competitors, or even those in tangential spaces.  Then, go to AngelList or Crunchbase and find their investors, including Angels, Seed Funds, and Venture Capitalists
  • Find conferences that focus on your industry.  Then look at the attendee lists and sponsors.  You’ll often see the investor pool that’s of interest, and you’ll also likely find corporate investors (who get less coverage on Techcrunch) and below-the-radar contacts for you to consider.
  • On another white board, list all of your wealthy friends or past coworkers.  Particularly focus on those who you think would absolutely rave about you.  They may not eventually invest in your company, but when they make introductions for you (because you’ll ask them to do so), you know that the message they deliver will be extremely positive.  And, of course, they’ll listen to your first pitches, to give you feedback and help you improve/hone your message.
  • Talk to your friends (who know you well) and ask them for their list of favorite, most supportive, investors.  Again, they may not be as likely to actually invest in you, if they focus on other areas, but with a strong referral they’re much more likely to meet with you, give you feedback, and possibly know other investors who may have a passion for your space.

Then, when you do reach out to people, you can include some of your lists, along with why you think they’d be interested in what you’re doing.  When I see those lists, it makes it easier for me to remember if I have good contacts for them, and those lists also help spur other ideas (it’s always easier to review a list than look at a blank page).  Plus, it make it fast and easy for you to really personalize your introduction mails, and shows that you do your homework and are detail-oriented (and respect/value my time, and the investor’s time).

These ideas are all pretty basic, but are often overlooked.  What other suggestions do folks have?

Update: Joe Wallin suggested this great post by TA McCann – Raising Startup Funding – 7 Things you Need to be Prepared

How to ask for introductions (to investors, potential employers, etc)

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I know this post has been written before, but this issue comes up so frequently, that I can’t be doing any harm by writing it again.  A variation can be found on Mark Suster’s How to Ask for Help Favors and Intros post, but his goes into a lot more detail — this post focuses on just two key parts of the introductions process.  And Tony Wright’s How to Ask for an Introduction post is probably where I mentally stole this from (he tweeted a reminder, and I do remember reading and loving it).

Many times per week, I’m asked to make introductions for people or startups.  I’m happy to do them, but the askers need to know that they truly do pile up.  If you don’t make them easy for the person you ask, you really lower the likelihood that we can help you.

So, here’s my advice:

1) Make sure that I know you and/or your product well enough to make the intro.  If it isn’t a deep connection, then you’re actually putting my reputation at risk by asking me to do this for you.  And I don’t always have the time to get to know you well enough.  It sounds harsh, but it’s true.  So, focus your introduction requests on people who will rave about you.  If you don’t know any of those people well, then you’re putting the cart before the horse — instead, start developing some of those relationships first (read Lines not Dots — another great Suster post).

2) Make it very easy for me to make the introduction.  In fact, make it idiot-proof.  I always ask people to “write the introduction for me, and write it as if you’re me, introducing you”.  That’s not (just) about saving me time.  It’s because it allows you to put the introduction into context (i.e. you saw they invested in startup/industry x which has some similarities to what you’re doing), link to any demos (people love functioning sites/apps), include any attachments, and include any imminent travel plans when you’ll be in their neighborhood (even if you’re lying, and will book the trip as soon as they say yes).

That’s it.  Repeat steps #1 and #2 above and your requests for introductions will go much better.

Onward!

p.s. Here’s another great post on this topic from Roy Bahat at Bloomberg Beat, and another from my former AWS co-worker David Levy.

What I read, who I actively follow, and how I consume it

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french bulldogs running
Running of the Bulldogs, from DogBreedia.com

I admit that this post is mostly to just get something new atop my blog, since I update it so infrequently.  But someone last week asked me what I read every day/week.

I’d refer you back to an older post, because amazingly, those are still all on my daily reading list — for startup industry just follow Fred Wilson, Mark Suster, Ben Horowitz, Paul Graham, and a few others.

For Seattle tech news, I like getting the daily email from GeekWire.

I also really like the daily mail from Twitter that picks stories/tweets that it thinks would be interesting to me — again, it almost always finds a few that I really like.  Yeah, I like getting emails — that way I can read or ignore from my inbox.  Else, they pile up in my feed reader.

On that note, since Google Reader shut down, I’ve found NewsBlur to be a nice replacement.  I think Danielle Morrill made that reco.  On that note, the startup-data mails from her new company, MatterMark, are excellent so far.

For regular professional updates, I like reviewing LinkedIn Connections emails each day — I regularly reach out to folks who I see updates on.

Peace out.

p.s. that photo has nothing to do with this post.  It’s just awesome.  French bulldogs absolutely rule.  If you don’t agree, face it, you’re an idiot.

Juggling flaming chainsaws, while on crack

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OK — I admit that I’ve never done crack.  And I’m not much of a juggler, even with tennis balls.

But, of late, I’ve felt like I’m standing on a stage in front of hundreds (my family, friends, co-workers, the Seattle (and broader) tech community, aspiring entrepreneurs and others) juggling an increasingly daunting mixture of flaming chainsaws and barking poodles, while balanced on a unicycle, all while on a crack high.  Overly dramatic? Yes.  Any less true? No.
The feeling (fear) reminded me of Jerry’s blog, The Monster in Your Head — I was letting the monster win.  Thus, Jerry’s last post was especially relevant, specifically this bit of wisdom from the Bene Gesserit (and that other Child of Dune, Brad Feld… and, Jerry, of course):
I read the above a few days ago — it resonated, but didn’t sink in.  Then, last night, my wife helped simplify the situation even further, by asking a few clarifying questions.  I won’t share them. But, I’d highly recommend that you get your own ‘wife’.

How hundreds of coffee meetings have paid off for TeachStreet

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Even though I keep my list of blog subscriptions pretty small, I’ve been weeks behind in my blog reading. Partially, that’s because I feel like I see most of them in Summify (yes, I LOVE Summify!) and my tweet stream, but I sometimes miss the really good posts.

In that vein, I just read Mark Suster’s post about the Importance of Doing 50 Coffee Meetings, as a way of expanding your network.  After reading it, while walking the dog, I thought about how many of the successes in my last 4+ years with TeachStreet have been the result of non-agenda coffee meetings and the like.  Many people look at these types of meetings as “the wasted-time-stuff-that-biz-people-do”, and I admit that I sometimes feel that way about them too.  But, another way of looking at them is as the types of things that ‘create luck’ for those who are willing to put in the effort.  They’re not activities with fairly-certain-outcomes, like writing code (where there’s a definite output) or testing a paid-search-campaign, and that’s what makes them so exhausting, at times.

If it helps, I thought I’d share some of the outputs of those types of random meetings — I bet that none of these wouldn’t have happened without the hundreds of meetings:

  • Our first $100k angel investor came from a friend’s intro; the investor met me one time, and called me a few days later with the news of his investment. Upon hanging up the phone, I actually screamed out loud.
  • Almost all of my angel investors were originally soft-pitched over coffee, as were many non-investors; more often than not, the non-investors helped with other introductions, ideas or questions
  • I originally met Daryn (our CTO, and the person I consider my TeachStreet partner) via a random networking meeting, where I met he and David Geller, as they were working on EyeJot. And, I’d bet that more than 75% of our employees were introduced, or met, over coffee and/or network introductions.
  • I met Joe Heitzeberg, over coffee at Macrina, to discuss a role he had open at Snapvine; by the time of the meeting, I had already decided on TeachStreet, but it’s a relationship that’s grown since 2007.  Oh, and he introduced me to our accountant, who’s just awesome.
  • The idea for TeachStreet crystallized over a coffee discussion with Jason Kilar, while we were discussing a pre-Hulu startup-idea that he was starting to accelerate toward
  • While not a coffee meeting, we ended up licensing our software to a company in Australia; they found us because of a video presentation I gave at a Seattle Tech Startups event — they caught the piece of the video where I said that “we’d be open to licensing our software”, and reached out (note — I also fielded ~30 of these international outreaches from others, that all went nowhere…)
  • I met Dave McClure years before any startup notions — he was on the Board of Unitus (a microfinance organization, where I was the guy responsible for marketing); as fast as he could spew ideas, I was sitting on the fringes of the meetings implementing/testing them.  That relationship took off quickly 🙂  Dave turned into a great friend, one of my earliest investors, and biggest advocates (and out of that grew uncountable press/blogger introductions for me, and referrals of Seattle-initiated-startups, by me, to 500Startups)
  • Out of a coffee-request overload, we created Hops and Chops, as a way to consolidate many of these conversations, and enable even greater early-entrepreneur interactions.  Entire startups have been assembled there, and numerous friendships have deepened.
  • We recently got one of our first exclusive-lead bus-dev deals done, in days (after multiple attempts with the company), after a coffee meeting where I helped them with some candidate sourcing
  • Finally, one of my very first startup inspirations/enablers was Andy Sacks’ Open Coffee, that he’s been running, at Louisa’s on Eastlake for 4-5 years, without fail.  And, as I look back, that’s where I met Tony Wright for the first time!
This is just a sample.  As I sit here thinking about this, I feel like I could keep rattling off examples for hours. You just can’t know where these meetings will lead you.  It’s important that you try to be selective (because the meetings will multiply, as people find you helpful/accessible), and do your best to limit them (maybe one per day?), but you absolutely need to put in the time.
Quite simply, TeachStreet wouldn’t exist if I hadn’t.