They say that all work and no play makes Jack a dull boy. But when it comes to the world of the Internet startup, the temptation is to play—to brainstorm, to team build, to dream—a little too much.
Soon enough, Jack finds himself a would-be entrepreneur who spent his last dime in savings from that gig at the law office on a Slim Jim from Conoco. Hungry, penniless, and slumped over a dingy Macbook, he wonders if his old boss will take him back.
As anyone with a startup can tell you, the real work of online entrepreneurship is not in the playing but in the money-making. And while play is what nourishes the mind, it’s money that nourishes the startup. Waiting too long to appeal to investors—or doing so unsuccessfully—will put the kibosh on your creation.
Luckily, reaching out to investors is no different than reeling in a lover. The key to successful wooing is to oh-so-subtly trick the object of your affection into believing they wanted you first. This, at least, was the takeaway from a Skillshare workshop hosted by David Tisch, managing director of the TechStars NY, a startup boot camp that was founded in Colorado.
On a recent Tuesday night at New York University, Tisch tutored several dozen Internet enterprisers on the fine art of making contact with investors. Wearing a black hoodie, a backward baseball cap, and jeans, and repeatedly scrunching a plastic water bottle in his hand, Tisch played the street smart startup guru to his audience of four dozen buttoned-down, fund-hungry men and women.
Tisch’s first word of advice—aside from admonishing the audience to “have common sense” in all interactions—was to take care with the medium by which one appeals to investors. Facebook, LinkedIn, and Twitter—these all assume a level of familiarity with the investor that could be off-putting to him or her. Instead, go for email, where the trick is to build a slow, personalized rapport over time.
In the best-case scenario, the initial email should be one that comes after an introduction by a contact of the investor—someone whom the investor likes and trusts. But barring that, a cold email should get right to the point. Investors, said Tisch, get between 300 and 700 emails per day. “The goal is to be reply-able in 20 seconds.” That means touting one’s product early on, as in, in the subject line. “The best emails at TechStars have the company name in parenthesis” next to the email header, said Tisch. The email body should also show off the product somehow, whether in a short video, a few sentences, or a link to the web page itself.
Other dos and don’ts when it comes to emailing potential sugar daddies and mommies:
• Do your homework on the investor, particularly if one is emailing without an introduction. A small detail about the funder’s past investments or activities can pave the way. (Remember, keep that cyberstalking professional.)
• Don’t ask for money or a meeting right away. Rather, ask for very specific advice on, say, product development, as a means to get to know the investor. No investor will give to an entrepreneur he or she doesn’t know.
• Do send emails on Sunday nights. Many people clear out their inboxes on Sunday before the workweek starts. Snagging an investor at this key time—before the Monday work rush—could make him or her more likely to respond. “Sunday is THE best time,” said Tisch. “It’s the rudest but it’s the best.”
• If a good rapport is developed over email, don’t necessarily jump for an in-person meeting. But if the face to face seems inevitable or preferable, do send the investor a list of times that work for a meeting, rather than claiming to have an open-ended schedule. This makes one look a bit desperate.
• The back-and-forth email exchange is an art. An entrepreneur should only reach out to the investor for a second or third or fourth email exchange when he or she has some tidbit of news to deliver, such as a new milestone in product development, or a secured source of funds. This way, each email builds on the next with meaning and purpose.
• Do be witty.
And what if the email exchange leads to a meeting? If it’s over the phone, ask the investor a question within the first minute to grab his or her attention.
And if it’s in person, arrive at the meeting place early, with a version—or at least a video—of the product ready to run on a laptop. Don’t waste the investor’s time by setting up after he or she has arrived.
And if the product itself is not quite ready to be shown, impress the investor with the entrepreneurial team. The trick is to convey seriousness about the project at whatever stage it’s at. “They don’t give a shit about your monetization plan until they like your product,” said Tisch.
“Ideas are worthless, they literally are.”
At said meeting, make sure to know how to speak intelligently about the Internet behemoths and where they’re heading—Facebook, Twitter, and Google.
But what if, god forbid, the investor won’t invest after all that? Then let the anger fuel the next conquest.
“My favorite businesses to fund are ‘fuck you’ businesses,” said Tisch. “Angry, interested, fired up entrepreneurs. Fire is ok. Get motivated.”