First Impression: Cold Email As A Funding Tool

Appeal-Letter-for-Financial-AidFor startups, emails are a powerful tool that can help get funding. The best way to engage with venture capitalists is by getting a warm introduction. Unfortunately, most people that start a business are not immediately well connected and it takes time to build a network. The problem is most investors prefer to deal with people that they know or have been referred to them. That means that you need to make them like you in just one email. The best way to engage with venture capitalists is by getting a warm introduction. That doesn’t mean that cold emails to investors is a complete waste of time. Box raised their first outside capital by cold e-mailing Mark Cuban.

David S. Rose, Author of “Angel Investing” says that “the problem isn’t so much the “cold call” as it is the “cup of coffee”. For most active investors, the problem is one of input overload and the inelasticity of time. Warm intro – it’s because we’re taking advantage of someone who knows both of us, and can serve as a first-pass filter to triage out the opportunities that are just not appropriate for us. So, forget the coffee (even mentioning it implies both cluelessness and a complete lack of respect for my time), boil your pitch down to the tightest possible sound bite (two or three sentences should suffice), and try to find someone who can introduce you to me to cut through all the noise.

The most common reasons for an email to get deleted are the content or format is so bad that it is impossible to read or understand anything, and the sender has been inconsiderate of the reader’s time. To avoid this fate, here are some DO NOTs in your cold email:

  • Extreme length (more than 1 or 2 paragraphs/8–10 sentences)
  • Lengthy/silly title (example: “Is X ready to help us change the world???”)
  • Overuse of business jargon & acronyms
  • Lack of numbers, only water
  • Misspellings, poor punctuation
  • Addressed to the wrong person or you’ve misspelled the name
  • The investment is in an industry outside investor’s focus

Solution: Follow a Simple, Straightforward Structure:

  • Title: Name of your company + one-liner
  • One intro sentence: (“Hi, I’m XYZ”) – be short but build credibility
  • 2-3 sentences describing the problem you’re solving and how you solve it – be a clear communicator.
  • 3-8 bullet points highlighting your traction, how large your company is, how much you’ve raised, etc.
  • One brief closing sentence with a clear ask. Always close by asking for a follow-up conversation. (“Please let me know if this interests you as an investment and I’d be happy to connect however you prefer”).
  • Deck attached to the email.

The goal of a cold email is not to land a sale or an investment. Your goal with the email is to show value and to persuade the reader to engage you in an initial qualifying conversation – the actual pitch comes later.