Most of the startup stuff I do is pretty exciting: crunch through numbers, talk to customers, build new products, figure out marketing hacks! But this part of being a startup founder… sucks. Learning how to find investors was exhausting, time demanding, and it was emotionally draining because the truth is most of the time I got rejected.
But we have to do it, don’t we? It’s part of the job. The process is all about network, and this is the hierarchy that you want to follow:
- People you know: friends, family and fools.
- People you know: 2nd level connections.
- Friends of your investors
- Conferences and events.
- Submit a deck.
- Cold emailing.
As you can see, cold emailing investors is an absolute last resort. I get so many founders frustrated by how their cold emails are not working, and the truth is, they won’t work. Raising money from investors you cold emailed is extremely unlikely. Not impossible, though, and I know a tip or two. But we’ll get there.
Let’s start with people you know, a category we like to call Friends, Family and Fools.
How to find investors for your startup: the ideal approach
Friends, Family (and Fools) at Pre-Seed
As you all might know already I’m Costa Rican. Even though my dad was a small celebrity back home, my family doesn’t have a lot of money, and therefore, not a lot of friends with a lot of money. Also, it’s Costa Rica: $500,000 is a lot of money any way you slice it.
And I still was able to raise some friends and family money. A testament to how it’s not impossible, and in my opinion, a must.
When you go looking for investors, strangers, people you don’t know, they will expect you to have raised some money from your own network. They will expect you to have depleted that option before pursuing money from strangers: but I can’t count the number of companies that just skip right through the…