- Founders are 13 times more likely to raise from venture capitalists if they have a warm introduction.
- But not everyone has these networks in place.
- Insider asked 11 VCs to share tips on what founders can do to get on their radar.
Speak to most venture capital investors about how they pick founders to back and a few themes emerge: a warm introduction helps; as does being a serial entrepreneur.
For anyone resorting to cold emails, it's likely they're up against 999 other founders trying exactly the same thing.
How can you get onto a VC's radar if you're a new entrepreneur, or don't have the network for an intro?
We spoke to 11 venture capitalists with billions under management — here's what they said:
1. Have a presence on market maps
Seth Pierrepont, a European partner at Accel, said the investor looks at market maps as part of its outbound research, which "most venture capital firms do", so a startup should make sure it is listed.
This includes data sources such as Pitchbook, Crunchbase, Beauhurst, and Gartner.
Although this is "more by chance", having a good description is also important as startups may be "intersected" based on the industry they are in.
How each platform collects data differs, which may lead to differences in company profiles according to Jay Wilson, investment director at AlbionVC.
"These differences may qualify a company out of an investor's sweet spot," he told Insider. "For example, some investors may focus on capital efficiency and therefore look at total funds raised to date. If this is misrepresented and too high an investor may not reach out.
"Keeping your company data relevant across myriad platforms obviously takes time but ensures the right investors reach out for the right reasons."
2. Bag a spot on an accelerator or growth list
The second type of outreach that Accel does is based on signals from the market.
Accel mostly invests at Series A onwards, so seeks out buzzy early-stage firms.
Pierrepont told Insider that being featured on the likes of Deloitte's Fast 50 is one way to catch his eye, or winning an award. Accel has purpose-built software than looks for award-winners and will "proactively reach out" to companies of interest.
"For young companies, whatever they can do to elevate their profile, it really matters, especially at the early innings," Pierrepont said. Accelerator programmes like Y Combinator can help, he added, but startups will likely be introduced to investors during the program.
Hendrik Van Asbroeck, partner at impact investor Astanor Ventures agreed. "Startups need to pay attention to communication," he said. "VCs can only contact startups when they are aware of them."
He told Insider that founders must make an effort to be present in the press, present at key events, communicate on fundraising, and elsewhere "VCs are listening."
3. Choose the right platform and make sure it's up to date
Enterprise investor Frontline Ventures sees "about 1,500 to 2,000" companies a year according to partner William McQuillan. "You know, we're gonna invest in about ten of those, but we don't have enough time to do full due diligence for every company that comes to us."
McQuillan said how a company comes to the firm helps it prioritize, admitting that a "warm strong recommendation" is "definitely" the best way to get high on an investor's list. For McQuillan, reaching out via LinkedIn or Twitter is the next best thing, and every investor is active on different channels.
Platforms should be kept up to date, even "super early-stage" founders should change their LinkedIn to "stealth mode" according to Emma Phillips, partner at UK seed investor LocalGlobe. "But ensure to add in what market they're building in so that only relevant VCs reach out," she said.
LocalGlobe also looks at a founder's background and profile, not just the company, to assess "why this founder for this market."
Phillips said relevant work experience showing "the deep knowledge you have acquired about the pain point you're trying to solve" should be highlighted.
Elena Mazhuha, investment manager at central and eastern European early-stage investor Genesis Investments, believes there's a delicate balance to be struck between self-promotion and demonstrating expertise.
She told Insider a savvy PR and social media presence, where a founder shares their specific knowledge and dedication to the industry, may encourage VCs to reach out.
"At the same time, startups should avoid branded or self-praising publications as they can work the other way round," she added.
4. Keep potential backers updated even if they're not right for now
QVentures runs a pre-seed fund and, according to managing partner Robert Walsh, knowing when a company has been founded or is fundraising at this stage "is the hardest piece."
He recommends that founders build out a list to keep investors updated.
Startups may get a lot of "no, not this round" responses, Walsh told Insider, but will "rarely find resistance" when asking VCs if they want to be added to an investor update list. "This means founders can be passively updating those investors over the subsequent 12 months, which can lead to an early cold outreach from a VC," he said.
5. Choose the right seed investors
McQuillan expects to hear about standout startups from seed investors shouting about their portfolio. "Make sure your seed investor is propping you up to all the Series A investors they're talking to, and make sure they're armed with the right things to be telling them."
Face time with others in the wider startup ecosystem is never a bad thing.
David Grimm, investment director at UCL Technology Fund, told Insider that founders should build their network. "More than ever VCs are asking their founders who they think are the most interesting startups around," he said.
6. Hire the right people
Frontline monitors LinkedIn, looking for people in senior at prominent tech companies who leave and change their title to CEO or founder.
"The only thing that you can say is that 'I'm a senior person in tech and I'm starting a company,'" McQuillan said. "Then we decide if the company is suitable for us.
"There was someone I saw and I was like, 'That person is amazing.' They're starting an ice-cream company, which is super cool but like not suitable for Frontline so I didn't reach out, although I'm actively watching to taste the product."
Phillips also watches out for startups that attract impressive talent and clients.
"If you have interesting customers or partnerships, make those known publicly, if allowed, as it adds a lot of credibility early on," she said. "Likewise with early employees who look impressive on paper and reference well. We always love to see that founders can convince great talent."
Others agree. OMERS Ventures managing partner Harry Briggs said his firm gets "particularly excited" when startups hire "great people", while Blossom Capital founder Ophelia Brown is "certain" that VCs will "come knocking" if founders focus on building a great team and product.
7. Understand the VC's investment strategy
Frontline wouldn't invest in an ice-cream company, but a food-oriented venture firm might. Understanding the investor's focus and investment strategy, and tailoring your company's description and content output to this, could help startups gain traction.
Blue Horizon is an impact investor in the future of food. Partner and chief operating officer Sedef Köktentürk told Insider the importance of understanding the investment strategy of the funds "can't be understated".
8. Be solution-focused
Köktentürk, like many impact investors, is "always interested" in meeting startups that are solving hard challenges. "You've got to also get our attention on the real impact and its role in the transformation of the food industry," she said.
Astanor Ventures' Van Asbroeck also said founders must "clearly illustrate" the purpose of the startup so that VCs understand its scalability and impact.
