The Hacker’s Guide to Startup Fundraising

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The Hacker’s Guide to Startup Fundraising

Originally published on fletcher.io

The day-to-day of starting a business can often end up being lots of very menial tasks: scheduling meetings, scrolling through lists of potential customers and investors, writing cold emails, copy pasting over and over and OVER again.

Well I’m here to help. I’m creating a series of guides on how to hack the processes people normally do by hand, allowing for massive time savings and improved results. Using a combination of productivity hacking tactics, web scraping tools, creative data sources, and scripting calls, I promise I’ll save you tons of time.

To start, I’ll cover a crowd favorite: fundraising. A huge undertaking for entrepreneurs both new and experienced. I’ll walk you through my process to remove repetition and get you in more meetings with investors. 

Find Investors Outside of Your Network

Finding investors outside of your personal network is a numbers game, but you don’t want to just shoot blindly. To start, a great strategy is to find as many companies as possible who have received investment recently who are in some way similar to your company. This can mean similar location, similar vertical, or some other characteristic. One of the best places to do this is on AngelList.

For this example, let’s assume you are starting a Colorado based SaaS company. You’re going to find all the Colorado based startups on AngelList who have raised money. Go to angel.co/companies, and set the filters appropriately: location is Colorado (or wherever you want), type is startup, and under ranges set the lowest amount of funding received to be at least $10k so that it only shows funded startups.

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Now, click the export button in the top right to get a list of funded companies in your area.

To get a few more – another potential search would be for SaaS companies in the U.S. that are seed stage, or maybe specifically in San Francisco if you’re doing a trip out there. We’ll start with this list for now.

Our goal is to find the people who invested in these companies. We could do that manually, but that would take hours!

Instead, we’ll query the AngelList API for each of these companies, and figure out who their investors are. Don’t worry, you don’t need to know how to code, I’ll handle that part. The first step is to create a new app on AngelList’s API, here: https://angel.co/api/oauth/clients. Once you’ve created your app, you’ll need token that is created. You can set the two URLs to be anything (http://google.com is fine if you aren’t feeling creative.)

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No More Copy and Pasting

Next up, I’m gonna give you a little script that runs through your list of companies and spits out a list of investors. This script finds the first and last name of investors listed on those companies AngelList profiles, and gives you a list of their website (if available) and angellist profile. Here it is! (just put in $0 to download for free, or donate if you want 🙂 )

To run the script (you’ll need a Mac), download it, then unzip it and open up the file called al_investors.rb using a text editor (I prefer Sublime Text). Add your list of investors by copy pasting the list of angellist URLs from the csv you downloaded into the appropriate line near the top of the file. Also add your token from the application you just registered at angel.co/api.

The top of your file should look something like this, with more companies and your own API key:

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Now, open up your Terminal application on your Mac. Run the following two commands to change directories to the appropriate folder and run the task:

cd ~/Downloads
ruby al_investors.rb

If you have trouble running the second line of code, that means for some reason the file name wasn’t “al_investors.rb”. Double check that it is the correct file name, rename it if needed, and make sure the edits you made with your API Key and list of URLs are in the file called “al_investors.rb” in your Downloads folder. Contact me if you run into issues.

Now, check your downloads folder for a CSV called investor_names.csv. It should look something like this:

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Great! Now you’ve got an awesome list of potential investor prospects.

Get in Touch with Potential Investors

This is where things get a little more manual, but there’s still some good hacks and best practices to use.

I’d recommend setting a simple but robust tracking system, or CRM. My personal, free preference is Streak – it keeps track of stages right inside of gmail, handles mail merge, and its free for up to 5 collaborators, with a limit on shared boxes (up to 50).

Install it from their site, then create a new pipeline:

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It will automatically create a pretty solid set of stages for you, my only two edits are to change “Sent Demo” to “Needs Follow up” and added a column after “Lead” for “Contacted.”

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Now let’s fill that pipeline up.

Add any personal connections manually to the appropriate stage of the pipeline to make sure you’re keeping track of everyone.

You need to import the list of investors from AngelList into your CRM. First, create three new free form columns for your new data – Website, and AngelList Url. Make sure it’s all capitalized correctly. Create one more column: Email Address. Then, select the “Import from CSV” option under more.

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All of the rows from the CSV of AngelList investors are now in your Streak Pipeline!

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There are two options to get in touch with these investors:

  1. Ideally, you want to try to get a warm introduction from someone who is excited about what you are doing.
  2. I’ll show you some cool hacks for how to get their email address and send them a cold email.

Warm Introductions

Let’s start with warm introductions. There are two great tools to find a second degree connections to your potential investors. The first one is obvious, but not utilized enough, LinkedIn. Do a simple search for the full name of the person in your Streak pipeline. I prefer to use the search view to find mutual connections. For example, here are the search results for Chris Nolet, the first person in my pipeline:

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I can click the little arrow and see my 2nd degree connections to Chris. This is much quicker and easier than actually visiting his profile.

If you don’t have a second degree connection and the person works for an investment firm or VC, another option is to just search the name of the firm and find out who you are most closely connected with. For example, people involved with 500 startups seem to invest a fair amount in Colorado. I can search for “500 Startups” and select “People who work at 500 startups,” giving me a nice list ordered by how closely connected I am.

Another great option to find easy introductions is Conspire. Conspire analyzes your email and the email of other people who use the service to figure out the frequency of communication and show you the closest connection based on that. You can search by name or by company to find 2nd and 3rd degree connections.

When you do ask for introductions, ask the person to do a double opt-in intro, meaning they should check with the other person if they are open to an introduction first. You should give your connection an email that they can simply copy/paste or forward along to the person who you are asking to be introduced to. This will preserve social capital and make sure that your introductions lead to good conversations.

Cold Introductions

For the potential investors whose emails you can’t find, it’s time to get creative. There is a great tool called Viola Norbert that will find someone’s email address given a first name, last name, and domain. Email Hunter is another great alternative to find anyone at a specific company, with 200 free requests per month. We already have names for our whole list, and even websites for the ones that my script was able to find, so you can try it for a few! Twitter can also be a great way to initiate conversation, try finding the investor’s profile to see if they are active on twitter, and write them a personal tweet about something they recently tweeted about.

For the ones where the domain wasn’t found through AngelList, you’ll need to do a little sleuthing on that person and figure out the most likely work domain for them. You can also try their gmail address and see if Norbert finds anything,

One final option is to use this email permutator to get all the possible email combinations, paste it into your compose box in gmail, and using both the Rapportive and FullContact plugin to plugin mouse over each email and see if anything comes up. Rapportive only matches on LinkedIn email, and Full Contact is able to match on other social networks.

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Once you have their emails, reach out with something like this:

Hey {Investor First Name},

I saw that you’re an investor in the seed stage of {example company}. I wanted to reach out because we are also a {region} based {vertical} company raising a seed round.

{1 or 2 sentence blurb about what you guys are doing}

For a deeper dive, here’s our deck: {link to deck}

If this seems up your alley, it would be great to sit down and tell you a little bit more about why our team is the only one in the world who can pull this off.

Let me know if you’re available in the coming weeks, and what’s easiest for you to meet or chat. I’m based in {your city} and can also do call/hangout.

Thanks,

{Your Name}

The goal here should be to get a meeting, not to get them to write a check right away. If they respond and seem interested, the next email should provide them with a bunch of options of times that they can pick from. I like either Assistant.to or Sunrise Meet to make that process simpler. Also, for your link to your deck, Docsend is wonderful, and will ensure you know who is looking at your deck (it often gets forwarded around internally, which is a good sign). If you want to create good momentum around your fundraise, try to schedule meetings all in a 1 to 2 week period. Investors talk to each other, and if you’re meeting with them all at once that’s often seen as a positive signal. 

Follow Up

As those email go out, make sure to move each person to the Contacted stage in your investor pipeline. Use Streak’s email tracking functionality if you’re interested in whether or not your emails get opened, and then use Docsend to understand who has actually looked at your deck. Go back every few days to see who has stalled out in the pipeline, but might have opened the deck or responded to an email and not followed up. Give them a quick nudge if you haven’t heard from them in 5-7 days – they most likely get a ton of emails and popping it back to the top with some good news will put you back on their radar. Don’t send more than 2 or 3 emails without a response (that’s just annoying), but don’t be afraid to be persistent. Just like any other “sale”, the decision isn’t always a quick one, and it takes time for both sides to get comfortable. If all else fails, you can also try a gif or something else creative in a 3rd or 4th cold email. 

It’s up to you to nail those in person meetings, impress the investors, and get some momentum behind your fundraise. This should at least get you past the cold start problem.

I’d love to hear any feedback on this process, things that I’m missing, and steps that don’t make sense or don’t work. Also, I need help picking the next boring process you’d like to see me hack! Please comment below with ideas about what I should cover next, or feedback on the process for this hackers guide.

My last ask – if you found this post valuable, please share it with a friend who you also think would find it valuable!

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