If you are a first-time entrepreneur or have little experience applying for investment for your project, you may be wondering how you should approach investors. Many co-founders make the mistake of knocking on all possible doors, replicating the same message and without discriminating between business angels and venture capital firms. Not only is this strategy not usually effective, but it tends to generate a lot of rejection among venture capital representatives. The feeling it gives them is that the entrepreneurs who target them are trying to catch flies with cannon shots and have not stopped to see who they really are or what they do. It's practically like sending spam. If you want to get venture capital funding or at least arouse some interest among investors, you should take a good look at who you contact and send personalized messages for each of them. A more focused and segmented strategy will always give you better results.
Here's What to Look For Before Contacting an Investor
What should you look for in order to write to a business angel or venture capital firm or not? What aspects will help you discriminate if you have to address them? There are several things to keep in mind. The first of these is the stage or stages in which these investors invest. It doesn't make sense to try to tell what your startup is doing in the seed phase to a VC that only financially supports emerging companies in a growth phase. Nor is it very reasonable that with a startup that has already closed rounds of hundreds of millions of euros you knock on the door of a venture capital firm that is committed exclusively to projects in SEED. Another decisive thing is the segment or sector on which an investor focuses his attention. In this section, you may need to do a little more research than in the previous one. There are certain business angels or VC firms that have a special predilection for certain topics or businesses, such as ecommerce, healthtech, proptech, fintech, mobile applications, etc.
Sometimes it's just a matter of being at the right time
Spinning a little finer, another aspect that may influence whether or not they invest in you is the temporary one. In this regard, it is best to follow venture capital representatives through their social networks, because they usually share what they are looking for, when they have funds and at what time of year they are unwilling to 'loosen their pockets'. This may depend on each individual investor, but also on external circumstances. For example, when the state of alarm was declared and lockdowns began, many business angels and venture capital firms paralyzed their investors. Thus, many transactions that were practically closed were postponed or canceled. Soon, we began to look at tourism, real estate or event startups - which a priori seemed attractive - with very different eyes. Likewise, others in health, technology for the elderly or video presence that went unnoticed acquired great interest in the venture capital sector.
