In an office hours session last year, Alex Kennedy (Founder & CEO of Purposely.ai) asked me a question I’d never gotten before: “If a founder reaches out to you about investing in their startup, what do you look at online to decide if you want to take the meeting?”. This is a seemingly mundane question, but this first impression is critical to nail. Here’s what I shared with him.
The goal of initial outreach in fundraising is to get a quick and accurate response from the investor:
If it’s not a fit, find out fast
If it may be a fit, get a meeting ASAP
As an investor, to give such a response, I need succinct and accurate information to qualify the opportunity.
The first thing I need to know is whether the company is within our investment strategy at all. For Laconia, we’re specifically looking for pre-seed and seed stage b2b software companies, ideally in the US and Canada. If the company doesn’t line up with those factors, it’s a pass.
The second thing I need to understand sounds very simple but is rarely clear: What does this company do? This is critical for two reasons:
To verify that we don’t have any competitive investments in the current portfolio (if we do, it’s a pass to avoid conflicts of interest)
To decide if I’m intrigued enough to learn more
What does this company do should include the following:
What the product is (A web app? An API? A Chrome plug-in?)
Who the customers are (Insurance carriers? F500 CMOs?)
Why it is valuable & differentiated (Unique data set? Unique insight into the customer’s pain point?
The best scenario is when this information is contained in the initial outreach (e.g.: text/attachments of email or form submission). Ideally, I won’t have to look anywhere else. If it’s not in the initial outreach, then I’ll take 1-2 minutes to look at the company’s website, Crunchbase, and/or LinkedIn. If it is still unclear, then it’s usually a pass.
A few important notes:
The company’s information should be consistent in email outreach, website, and Crunchbase/LinkedIn profiles. While investor-facing positioning may be different from customer-facing messaging for good reason, there should still be consistency in the core product/value prop. Otherwise, it’s harder for me as an investor to determine what I’m considering.
It should be clear who the founder and/or CEO is. If that is hard to figure out, or if someone other than the founder and/or CEO is doing the initial outreach, that’s a red flag.
I recommend including a pitch deck in your initial outreach. (Here is some context on how to put together a compelling deck.)
If you have any thoughts or questions, feel free to reach out to me via email at geri [at] laconia [dot] vc or on Twitter (@geri_kirilova). And, of course, if you are raising a pre-seed or seed round for a b2b software company, we are all ears via our pitch submission form 🙏
