Raising Your Institutional Round: Chapter 10

This is the 10th chapter of my upcoming book, “Move the Needle Anyway(s): Raising Your Institutional Round.” There are a total of 16 chapters. The book is currently with the publishers, however, I wanted to start sharing the content in a form of a series of blog posts so the startup ecosystem can benefit immediately. I hope you enjoy :)

Chapter 10: Secure Your First Meetings

At this stage, I have covered content assets that you will need before you commence fundraising. I also covered the psychological foundations of fundraising and walked you through the arc of an investment—from securing the first meeting to getting a term sheet. In this chapter (and subsequent chapters), I will walk you through the more detailed nuances of the process. 

First, it is time to activate your network to get your first meetings on the calendar. I suggest batching outreach in groups of 10 people—this gives VCs a few days to respond (yes or no) and schedule a time on your calendar. The next step is to outreach to the next batch of 10 and so on. The reason you don’t want to slow-burn outreach is two-fold:

First, you want the investor and startup ecosystem to start speaking to one another about you. The startup ecosystem is a small world, especially in the valley. When you announce you are fundraising and position your opportunity, people will start speaking to one another to find out more about you. I see this all the time. If this is your first-time raising an institutional round, it is also the way you will be announcing yourself to the startup ecosystem. 

Second, you want people to move through your funnel around the same time. To illustrate what you don’t want—one party moving you to a partnership meeting while all other parties have only had a first meeting with you; it is unlikely that other parties will be able to catch-up in time to make a counter-offer should you get a term sheet. Now, this still happens, and having a term sheet isn’t such a bad place to be—however, what if it is a term sheet from an investor you aren’t actually excited about? What if the terms are so unfair and low-ball but you have no grounds to negotiate?  

1) Direct Outreach to First Degree Connections

Recall that social network science shows that people tend to clump together. Therefore, the logical step is to first go deep with your first-degree network before you approach your second-degree network. 

If you have been doing a good job of engaging with the startup ecosystem from day 1, there is a high probability you have already been in touch with institutional investors even before launching your first institutional fundraising round. If that is the case, you can approach these individuals directly. Likely, they will have some record of you and your company, either in their internal CRM and/or an email thread. Your outreach email to them will be a combination of two things:

• Reach out and re-establish context based on your last interaction with them—jog their memory. More often than not, your business will have changed since your last interaction, so it’s good to let them know this. 

• Share your snippet (you created this in Chapter 7) and a link to your deck. 

• Request a 30-minute meeting over Zoom, or, if incredibly convenient, over coffee in-person. 

2) Requests for Introductions via First-Degree Connections 

If your first degree connections in the institutional VC world are sparse—especially if you are a first-time startup founder—then you want to pay special attention to this section. You will need to engage your first-degree networks and ask them to help make introductions so you can get to relevant second-degree connections. 

Engaging your second-degree network requires a different approach to engaging your first-degree network. You can use tools like AngelList, Crunchbase, LinkedIn, Facebook, and X (formerly Twitter) to determine the right second-degree connections. To reach out to your second-degree connections professionally, you need a 'Request for Introduction' (RFI) that clearly states your intent and purpose (we will walk through an example of this below). 

I don't recommend using cold email outreach. Instead, it is wiser to activate your 1st-degree (warm) networks who will use the double opt-in method to connect you with others. The double opt-in works as follows:

• You request an introduction from your introducer.

• The introducer passes it on to the party you want to connect with to get their written consent to make the connection.

• The introducer makes the connection. 

You want to find the best referrers within your network—the ones who will provide you the most influential reference to the investors you seek. The referrer is going to go out of their way to help introduce you to numerous people in their network—people they have trusted relationships with. Furthermore, if they are a 'super node'—someone who receives numerous requests for introduction—they are probably inundated with emails. So, you want to make their life as easy as possible. Again, it is all about removing friction from the process. 

The good news is, people get a good feeling if they are responsible for making a connection that leads to positive outcomes. Furthermore, by making connections that lead to positive results, the introducer is strengthening his/her status in the ecosystem. Therefore, an introducer is more likely to make an introduction if:

• They feel like there is a high likelihood of a positive outcome. Your snippet should be sufficient for this since it will reflect strong highlights and progress you have made. 

• You have made their job as easy as simply forwarding the email and appending their own note of support. 

The best way to reach out to your second-degree connections is by using a 'request for introduction' email and including your snippet (discussed earlier) within the body of the text. The essence of it is this: you are asking your first-degree connection to make an introduction to a notable investor whom he/she knows. You start the email by clearly marking out:

• Who you want an introduction to. In the above example, they are requesting for an introduction to Taizo at Visionnaire Venture. 

• How specifically you align with the investor. In the above example, they use their snippet to communicate that they are a news startup, a type of startup that Taizo has invested in before. 

The above example shows that the founder has done the work. They have established their company as a relevant investment, and they have explained why they are approaching the specific fund. At the end of the email, they have included a DocSend link to their 10- to 15-page deck. More often than not, a VC will expect a deck before committing to a meeting—this is fair and helps streamline their processes. Many VCs won’t even take a meeting if founders are too cagey about their deck. I recommend providing a deck and a brief blurb ahead of time. 

Remember the goal of outreach: get first meetings lined up. Don’t overcomplicate or overthink the email—nobody will fully grok your business in one email and no single email will lead to an institutional term sheet overnight. You simply need to demonstrate:

• Social proof and credibility: Someone credible is vouching for you in the ecosystem. Your referrer will help with this.

• The opportunity is intriguing/exciting enough to warrant further exploration. Your snippet helps with this.