Founders Seeking Funding To Investors You’re A Bus

Founders Seeking Funding… hear this… when approaching investors… you are just a bus. If I miss you, even if you are a great bus… there will be a new bus stopping by in 15 minutes.

What brought this on? Once again, I received LinkedIn spam from an entrepreneur seeking an investor. I get two of these spam LinkedIn requests a week. This can’t be an effective way to raise money.

Let’s look at the message.

My name is Wilder Rumpf, I am the CEO of FinTron, a Financial Tech startup offering fractional share investing, banking and budgeting to new millennial investors. We have a live app and two functioning sites: Currently raising capital. We have followed you on Angellist, give us a look if interested.

What’s wrong with that?

Well first, I thought there is no one in the world named Wilder Rumpf. No sending me this spam and signing it Wilder Rumpf must be a prank. Then after a little research, I found there actually is a Wilder Rumpf trying to raise money for a company named FinTron. One piece of advice, if your name is Wilder Rumpf, don’t lead your cold spam message with that. Second, even if your name was John Smith… I don’t care what your name is until I care what you can do for me. Nowhere in that message does Mr. Rumpf tell me why I should get my rumpf out of the chair and take some kind of action in his favor. There is nothing compelling in that message.

Second, my Angellist profile reads,

I’ve never been in Jail except to visit family. I’m not making new investments. If I was, I’d contact you… don’t contact me.

Got that, I’m not making new investments and if I was, don’t call me, I’ll call you. When I was making investments, I made it clear that I don’t invest with people that reach out to me cold. That I had a method to source deals and if you can’t figure out how to get in my pipeline, I wasn’t interested in your company or more specifically, its founder. I don’t care if FinTron is the greatest idea since fur-lined sinks… I’m going to wait for the next bus.

It’s important for founders to understand the difference in perspective. For the founder, their company is not a bus… it’s their baby. It’s the only thing they are working on. It is all. It is your everything.

To me the investor (note: former investor), your company is just a bus in a fleet of busses. It is one more thing that may or may not be added to my portfolio. It is not my be-all or end-all. There are a thousand busses standing in line to get into my fleet. If I miss your bus, it feels inconsequential to me… I’ll just take the next bus.

So here’s a list of don’ts.

  • The Don’ts

    • reach out cold to an investor… find a way to get a warm introduction
    • reach out to investors without doing any research on them… know your target and how to get their interest
    • send investors unsolicited emails or social media messages
    • pay money to get in front of investors (if don’t have the hustle to get in front of an investor without paying for it, how are you going to get customers, employees, strategic partners?)
    • don’t demo your product unless you’re asked
    • avoid exorbitantly priced (anything over $200) pay-to-play pitch events (show the investor that you’re capital efficient and find the many no or low-cost opportunities to pitch to investors).
    • avoid online social media sloppiness
      • No politics, alcohol, drugs, and sexism
      • Inappropriate images
  • The Do’s

    • Research the investor’s preferences and pitch to investors that invest in companies that match your company’s profile
      • Geographic investment presence (investors tend to limit the geographical area in which they invest)
      • Company stage (Some investors won’t invest pre-revenue, some invest only in series A, etc.)
      • Sector (most investors concentrate their investments by sector, B2C, B2B, FinTech, Cyber, Health Tech, etc.)
  • find someone who can make a warm introduction to your target investor
  • present to local angel groups, or other local non-pay-to play quality pitch forums. For instance in the DC Region:
  • Have a strong online presence with good professional content
    • AngelList profile
    • Gust profile
    • LinkedIn profile
    • Twitter profile
  • Don’t just pitch what and how you do things… give me a reason why I should care? Why is this big? Why is it important?
  • Engage a law firm that is experienced papering seed and Series A funding rounds. They can help advise you on how to raise money and make introductions to investors. In DC that means firms like:

If you remember one thing, it should be this. Investors have hundreds of opportunities. When they invest, they invest knowing that only a small percentage of their investments will be winners. Most investors are looking for a reason not to invest. When you screw up the approach, you show the investor that your bus has issues. Don’t give them a reason to pass on you and wait for the next bus

Next Bus!.