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Mastering the Art of Emailing: A Guide to Attracting the Right VC Investors

July 25, 2023

In the fast-paced world of VCs, where the average clock rate of finance email engagement stands at a mere 2.72% (as reported by Mailchimp), capturing the attention of venture capitalists (VCs) becomes an arduous task. With VCs receiving an average of 12 pitches per day, it’s crucial to stand out from the crowd. To enhance your chances of getting an investor to actually read your email, we have curated a comprehensive list of dos and don’ts.

The 2 Essential Steps Prior to Contacting an Investor

Are you VC fundable?

Before sending that email, take a step back and assess if your startup is VC fundable. Not all startups are suitable for VC investment, and that’s perfectly okay. Typically, VCs look for high-growth startups that have the potential to provide significant return on investment. 

Take our investor readiness assessment to see if you’re VC fundable.

Research and Understand the Investor’s Thesis & Profile

Before hitting the send button, it’s crucial to familiarise yourself with the investor you’re targeting. Learn about their investment history, the sectors they are interested in, their funding stage preferences, and the geographical regions they operate within. Checking the compatibility between your startup and the investor’s preferences can save both of you a lot of time. 

Once you have identified potential investors, dig deeper to gather more information about them. Use platforms like LinkedIn, Twitter, and the investor’s personal blog or website to understand their investment philosophy, recent investments, areas of interest, and personal tidbits that you could use to personalise your email.

Investors usually have a clear focus when it comes to the industry, stage of the business, and the type of business model they prefer. This will help you shortlist potential investors who are more likely to be interested in your business proposition. If your startup doesn’t align with their investment focus, there’s a high probability that your email might be ignored.

Now you’ve identified your list of potential investors, let’s craft the perfect email.

Your email subject should be short, specific, personalised, and clear. It should hint at your startup’s achievements or potential and align with the VC’s interests. Avoid hyperbole and keep it professional.

Personalise Your Email Based on Your Research – inc positive signal

Once you’ve researched the investor and verified alignment with their investment focus, you should be equipped to craft a personalised email with a strong positive signal. 

VCs love validation. Whether it’s impressive user growth, strong customer testimonials, or a robust, experienced team, having positive signals can provide that much-needed credibility and pique a VC’s interest.

And while a generic email can come off as impersonal and spammy. If you mention some of their past investments you admire, refer to a recent keynote they gave, or mention a shared connection or interest, it shows that you’ve put in the effort to understand them and their investment strategy.

Craft an Engaging Subject Line

The subject line is the first thing your recipient will see and should compel them to open your email. Make sure it succinctly summarises your business proposition and stands out from the generic “Investment Opportunity” emails they likely receive often.

Keep it short, the complete text should be easily readable when viewed on a mobile phone notification.

Let’s start with some great examples of email subject lines:

1. “PropTech startup| 300% YoY growth | Exited Founder | Seed investors wanted”

2. “AI in healthcare: Improving patient outcomes by 5x while reducing costs 250%”

3. “Tim Draper-backed Fintech – 500K users – Exited founder – Series A”

4. “E-commerce logistics startup | $1M+ ARR | Seeking strategic investor

These subject lines are compelling because they concisely convey what the company does, mention a key success or growth statistic, and they state the type of investment being sought. 

Here are some examples of bad email subject lines:

1. “Investment Opportunity”

2. “Please read this”

3. “Funding required for startup”

4. “Can we talk about my business?”

5. “Looking for an investor”

6. “Invest in us!”

7. “10 minutes of your time”

8. “100X ROI investment opportunity”

These subject lines are ineffective because they are too vague, lack specificity, and do not convey what the business does or why the investor should be interested. They don’t showcase any unique value proposition or indicate the stage of funding the startup is in. These factors reduce the chances of the email being opened, let alone securing interest from the investor.

Keep Your Email Brief and Direct

Your email should be concise, clear, and to the point. Start by introducing yourself and your company, then briefly describe what your business does and why it is unique. Remember to provide some compelling numbers or data that demonstrate your business’s traction. And use bullet points.

Write an email body that gets your pitch deck opened

The body of your email should succinctly explain your startup’s value proposition, why you’re reaching out to this specific VC, and what you’re looking for.  Your email body should be concise, respectful, and intriguing. Highlight key achievements, provide a clear call to action, and attach your pitch deck. 

Share a pitch deck that gets an investor reply\

A good deck tells a compelling story, is visually appealing, and is easy to digest. Let it demonstrate your startup’s value proposition, show market potential, and introduce your team. It should also explain your revenue model and provide financial forecasts.. In contrast, a bad deck might be overly detailed, unstructured, or lacking crucial information.

Follow our linkedin page, like this post, share it and DM  to 💡unlock our VC-proven and tested Pitch Guideline, featuring Slide by Slide guidance. 

You can dive deeper into your pitch deck’s potential and decode your investor appeal with our Scorecard – a comprehensive tool that objectively assesses your startup’s potential, identifies areas of strength and improvement, and provides actionable insights. Understand where you stand and strategically enhance your appeal to secure the funding you need.

Clearly State Your Call to Action

What do you want the investor to do after reading your email? Whether it’s providing feedback, expressing interest, or scheduling a call or meeting, make your call to action (CTA) clear and easy to follow.

Avoid Triggering Spam Filters

Avoid using phrases and keywords commonly associated with spam. Also, ensure that your email address is verified, use SPF and DKIM records to ensure your email’s authenticity, and maintain a low bounce rate.

Phrases that founders should avoid using when emailing VCs as they might be interpreted as spam or make the email seem less professional:

Guaranteed success: Venture Capitalists understand that investing in startups involves risk. Promises of guaranteed success can seem overconfident and naive.

This is a unique opportunity: The phrase is overused and may trigger spam filters. It’s better to explain why your startup is unique in tangible terms.

Once in a lifetime Similar to the phrase above, this is a cliché and might not be taken seriously by experienced investors.

Get in now before it’s too late: This creates a sense of urgency that may come off as desperate or manipulative.

Huge return on investment: Without providing specific numbers or data, this phrase can seem empty and potentially misleading.

Trust me: Trust is earned through consistent actions and evidence, not simply asked for.

We will be the next [successful company]: Comparing your startup to successful ones (like saying “we will be the next Amazon or Google”) without solid facts can appear presumptuous.

Please forward this: Asking the recipient to forward your email to other VCs or their contacts can be seen as unprofessional and desperate.

Help: This word can make your email sound desperate and might get caught in spam filters.

Confidentiality assured: This may seem suspicious as professional VC firms always maintain confidentiality.You want to sound professional and show that you understand the business and the risks involved. Be concise, and let your business plan and growth strategy show your potential value instead.

Show You’re a Good Fit

Highlight why your company aligns with the investor’s investment thesis. Show that you’ve done your homework, and your company fits their investment criteria.

Here’s a simple template you can start with:

Subject: [Your Company] – [Unique Value Proposition] seeking [Funding Amount]

Hi [Investor’s Name],

I am [Your Name], the founder of [Your Company], a [Your Industry] startup that [What your company does]. 

I came across [something about the investor] and felt that our company aligns well with your interest in [Investor’s area of interest].

Our current traction:

  •  [Mention significant achievement or compelling metric].
  •  [Mention significant achievement or compelling metric].
  •  [Mention significant achievement or compelling metric].

This had been achieved by a team of [Number of team members] that has previously [talk of your team’s achievements prior to this startup, use numbers where you can]

We’re currently seeking [Funding Amount] to [What the funding will be used for].

I would appreciate it if you could take a look at our pitch deck attached and provide your valuable feedback. 

Looking forward to hearing from you.

Best,

[Your Name]

Remember, while this template can serve as a starting point, the most successful cold emails are those that are personalised and tailored to the recipient.

Be Professional

Ensure your email is free from typos and grammatical errors. Use a professional tone and refrain from using overly casual language. While you want your passion for your business to shine through, remember that this is a business communication.

Use Your Company Email

It’s important to send the email from a company email address, ideally one that includes your name, to establish credibility and professionalism. 

Offer Value

Make your email not just about asking for funds but also about offering value. Whether it’s an opportunity to be a part of the next big thing in your industry, or an idea that aligns with the investor’s interests, make sure they understand what’s in it for them.

Send and Track Your Email

Use email tracking tools to monitor if and when the investor opens your email, how many times it is opened, and if any links are clicked. This will help you measure the effectiveness of your email.

Email tracking systems are tools that allow you to know if and when your emails are opened, and what links are clicked within your emails. They can provide critical data on email engagement and can be particularly useful when sending cold emails to investors or prospects. 

Here are a few examples of email tracking systems:

HubSpot Sales Hub: This tool is a part of the HubSpot ecosystem and provides email tracking as part of its service. It notifies you when an email is opened or a link is clicked. It can also schedule emails and provides a document tracking feature.

Yesware: Yesware offers tracking for emails, presentations, and pageviews, providing data on when your emails are opened, where they’re opened, and on what type of device. It can also show you if your attachments are viewed and for how long.

Mailtrack: This is a simple email tracking solution that integrates with Gmail. It tells you if your emails have been read and how many times they were opened. 

Streak: Streak integrates directly with Gmail and is particularly helpful for CRM purposes. It provides information on when and where your email was opened.

Mixmax: Mixmax is another tool that offers powerful analytics, including tracking opens, clicks, downloads, and replies. It also provides features for scheduling emails and creating sequences.

BananaTag: BananaTag allows you to track emails, schedule sends, and create email templates. It can be integrated with both Gmail and Outlook.

Follow Up

If you haven’t received a response after a reasonable period, don’t be afraid to follow up. Be polite and persistent, but not annoying.

Follow up 3 business days after the first email is sent and then 4 business days later.

Be Patient

Remember that investors are busy people and might take time to respond. Be patient, and while it’s okay to follow up again after a week or two, avoid sending multiple follow-up emails in a short period.

Writing an effective cold email to potential investors is more art than science. It requires a thorough understanding of your audience, clear and concise communication, and a touch of personalisation to make your email stand out. The steps and template provided here will give you a good starting point, but remember that the most compelling email will be one that tells your unique story and shows why your startup is a worthy investment.

As you embark on your journey towards securing VC funding, remember that the path may be challenging, but it can also be rewarding and transformative. The art of writing an effective cold email to investors is a crucial first step, and we’re glad you’re prioritising it. We hope that our guide serves as a valuable resource for you in crafting compelling and personalised emails that grab the attention of prospective investors.

At The200BnClub, we understand that the process doesn’t end at sending cold emails. We’re here to help every step of the way, from refining your pitch deck to preparing for potential meetings with investors. Our accelerator program offers an array of services designed to maximise your success in the fundraising process. So whether you need help perfecting your pitch, understanding investor responses, or navigating through the investment landscape, you can count on our expertise and commitment. You can apply to our program here.

We wish you the best of luck with your VC outreach. May your passion and innovation resonate with your potential investors, and may your entrepreneurial journey be filled with success, growth, and valuable learning experiences. 

Other materials https://odetocoldoutreach.notion.site/An-Ode-to-Cold-Outreach-6d7dd3ba3f5844188158d31dee7c36eb
https://elizabethyin.com/2016/09/01/7-tips-for-cold-emailing-investors/
https://abhim.substack.com/p/the-art-of-crafting-your-startups

Is Gender Inequality in Business Still Prominent? The Gender Index Report 2022

July 20, 2022

Gender inequality in business is about more than just the wage disparity between men and women; it’s also about female-led companies or their evident lack.

In the UK and worldwide, women continue to face barriers, such as problems accessing external funding, gender biases, skewed household dynamics, or a lack of support, when establishing businesses.

The Gender Index recently published a report that utilised AI-powered technologies to collate data from 4,412,017 active companies and 1,242 venture capital and private equity investors to reveal a deeper insight into the landscape of women in enterprise.

In this blog series, we bring you the key findings of the research and discuss the need to stimulate the growth of female-led enterprises.

The first article will concentrate on the data from England and Scotland, whereas the second part will cover Wales and Northern Ireland.

So, without further ado, let’s jump right in.

National Gender Index Results

We’ll begin with a glance at the national data before moving on to the nuances of each country.

According to the report, active female-led enterprises account for 16.8% of all UK businesses. Interestingly, in 2021 one-fifth of newly established companies were female-led, which shows that the gap could be slowly narrowing, but it’s still not enough.

The most apparent inequality across the UK exists in high-growth companies. These include FinTech, digital security, financial services, property and land development, and medical instrumentation.

Strikingly, there are clear tendencies when it comes to business funding. The majority of investment in the UK goes to male-led enterprises (66.1%), with just 11.9% going to female-led companies, and the rest flowing to mixed-leadership businesses. Furthermore, the angel is the most common type of investment in women’s startups, with female angels being more inclined to invest in fellow women entrepreneurs.

Finally, the leadership composition in the UK greatly varies depending on the sector. Male-led companies dominate most industries; however, female leadership is more pronounced in the health, wellbeing, social care, and education sectors. This might be explained in part by the large proportion of female professionals in these fields, or by the overall skewed perception that women are better suitable than males in these sectors.

Findings for England

Data obtained for England demonstrates that out of all the nations within the UK, it has the highest percentage of female-led businesses.

Stark Differences Within Regions

Nevertheless, there are some evident disparities between different parts of the country. Illustratively, statistics reveal that London (18.3%) and the South East (16.8%) have the most female-led enterprises, whereas Yorkshire and the Humber (15.6%) and the North East have the least (15.3%). 

Evidently, in the northern regions of England, in several high-value-added industries, women-led enterprises remain underrepresented. This could be partially attributed to the widening north-south divide, with more government investment flowing into the London metropolitan area.

Below-Average Female Representation in Tech and Finance

Women in the technology and finance industries face numerous obstacles; the lack of diversity and bias makes success in these fields challenging.

According to data, only 9.1% of women lead financial services firms and 12.2% run tech and communications enterprises. Consequently, this limits a country’s ability to lead innovations and generate higher revenues through a diverse workforce.

What’s the Situation in Scotland?

Relative to the UK average (16.9%), Scotland has a slightly lower rate of female-led businesses (15.4%). Strikingly, Scottish data reveals that female-led high-growth enterprises are more widespread in Scotland (12 %) than in the rest of the UK (8.7%).

However, the Gender Index reveals that raising capital in Scotland is more challenging than in the rest of the UK. Out of 34,385 women-led companies, only 6,980 (3.1%) attracted external investment, potentially limiting their growth potential.

In Scotland, specific industries, such as arts, entertainment, recreation, education, and health and wellbeing, seem reasonably well represented compared to the rest of Britain. Nonetheless, finance is one of the industries where female-led high-growth enterprises are either absent or present in minimal numbers, which reveals a grim situation for Scotland.

We’re Prepared to Help You Challenge the Status Quo

The 200 Billion Club believes we’re still far from a fair representation of women in business. Our goal is to help female founders secure funding and achieve their full potential by breaking stereotypes and stigmas. 

Do you want to learn more about our expert-led 12-week programme for women founders, which teaches how to pitch effectively, negotiate powerfully, and put your business in the best position for funding success?

Contact us today for more information.

From MVP to Market Ready. Common Startup Mistakes and How to Avoid Them

June 7, 2022

A recent report by Sifted indicates that starting a successful business could be an arduous undertaking while keeping it operating past the seed stage is even more challenging. 

In fact, on average, 90% of startups fail due to numerous significant obstacles that get in the way. However, despite the dose of reality, you shouldn’t be discouraged as an entrepreneur to embark on your next venture.

This article delves deeper into the nature of establishing a future-proof business, exploring the most prevalent startup challenges and how to overcome them.

So, if you want to learn more about the topic, stick around till the end.

Reasons Why Startups Fail

According to the CBInsights Survey, startups fail for several reasons, including an inability to raise additional financing, a mismatch in the market, being outcompeted, and a poor business model, among others.

Interestingly, 38 percent of firms indicated that the primary cause for bankruptcy was a lack of cash and an inability to raise capital. Looking further into the demographics, women-led enterprises face even more significant challenges, receiving only 2.3 percent of venture capital funding in 2020.

The second and third causes of startup failure were inadequate market demand and competition; however, despite knowing the ‘why,’ many businesses still fail to get off the ground. Indeed, startups can be notoriously complex to operate, but spotting the right opportunities and carefully navigating the obstacles can pave your way to success.

Tricky Early Stages for a Startup

From developing the initial idea to launching the product, running a startup business means a steep learning curve for everybody involved. As an entrepreneur, you must know the critical initial stages that can break or make your business.

Don’t Underestimate the Importance of Market Research

A solid business idea is a basis for an MVP. But, just having a great concept or a product does not automatically mean that it will appeal to the market – you must also diligently research your target customers to know exactly what clicks with them.

Sifted’s data confirms that only 10% of startup founders were confident in their go-to-market strategy before launching the product. Indeed, many entrepreneurs admit that they analysed markets too late, failing to nail the commercial model and customer approval early on, which led to premature business failure. 

At the 200 Billion Club, we advise our startups to use a framework for product/market fit that includes marketresearch, which can be as simple as phoning your potential future customers in order to understand first their needs and second whether your product will be useful to them. This technique has the added benefit of building your future customer base. As one of our founders always says “people love to talk about their likes and dislikes but they don’t like to be contacted for for a direct sale, it’s important how you proffer the ask for your research.”

Take Feedback On Board

The product-market fit is somewhat fragile at the beginning; thus, you need to absorb all the feedback on your product. Negative words can hurt and hamper motivation, but taking them onboard will ultimately allow you to perfect the product for your customers and save money in the long run.

Caroline Hughes, CEO of Lifetise has been building her company with feedback since inception: “You need to build your openness and resilience to feedback early. Get the first version of your product out into the market in its ugly, unpolished state and let your audience tell you what works. We have a mantra at Lifetise of “build in public.” You can only improve the product if you have enough people using it (quantitative data) and telling you what they think of it (qualitative data).”

Tap Into Operational Expertise Early On to Enable Growth

As and when your business grows, you want to have the right people on board – and that doesn’t mean junior staff members. We’re talking about senior talents with the right expertise to take your venture to the next level. Often, startups are reluctant to aim high when it comes to early hiring decisions, but with the right-fit candidate, the investment can pay off quickly.

As an entrepreneur, you might want to do it all by yourself, thinking you’ll save the resources. Operating a company alone can get lonely and daunting as soon as you hit an obstacle. Failure to hire additional staff and tap into consultants means you undervalue the potential these individuals can bring to the table. One of our founders, Amber Ghaddar says: “If you have just finished your raise, then a market downturn is a great opportunity to hire talents at a more competitive rate. But keep in mind if you are about to raise in less than 12 months (in a downturn market), you need to adjust your priorities and make sure that the ROI on your expensive hire is worth it”. More on how to navigate your startup through market downturns here.

Key Takeaway

Running a startup requires precise orchestration of multiple fronts, which is often easier said than done. Ultimately, it boils down to three key elements – the unique business idea, the ability to raise capital to support product development and growth, and the right people within and outside your organisation.

With a robust business idea that generates sufficient demand, you can be sure that your product will gain traction and provide a basis to raise additional financial capital. In addition, surrounding yourself with experts early on will offer new perspectives in the most efficient way to impact your bottom line.
At The 200 Billion Club, we want to level the playing field for female entrepreneurs across various industries to get the financial resources and the help they need to succeed. Our unique 12-week hands-on programmes for high-potential female founders can open up the doors to effective pitching and powerful negotiation to put your business in the best possible position for fundraising success.