For startup founders, forging and maintaining connections with investors is essential for success. Whether you’re sending cold emails or following up with interested investors, you need to know how to communicate effectively. Here’s everything you need to know about when, why, and how to write an email to an investor.
When you should email investors
Most startup founders cite two key reasons for connecting with investors. Email investors when you have one of these main objectives:
- Pitches: When you’re seeking funding, there’s no better way to start your pitch than by email. Do your best to get a warm introduction from a colleague or from your investor network first. If that proves impossible, but the investor still seems like a great fit for your startup, send a cold email to introduce your startup.
- Updates: After you’ve made your pitch, secured your funding, and built a connection with an investor, don’t go radio silent. Instead, keep your investors in the loop. Aim for monthly updates that inform investors about progress toward goals, major changes, or significant news. Save time by sending standardized emails that leave a little room for personalized content.
What you shouldn’t email investors
When you connect with investors by email, take care to avoid a few substantial issues. Never email investors the following:
- Lengthy introductions: Just like startup founders, investors are incredibly busy. They don’t have time for overly long emails, and you can’t rely on them to dissect long blocks of text to find the meat of your message. Instead of rambling, keep your email concise and straightforward.
- Irrelevant pitches: You’re wasting your time and the investor’s time if you don’t do your homework. Know which investors would be a good fit for your company, and stop yourself from emailing investors who you know don’t focus on your industry.
- Aggressive insults: As any of the colleagues in your shared office space can tell you, the startup world is a competitive place. Even if your startup has direct competitors, however, it’s your responsibility to keep things cordial. Never email an investor with insults or complaints about rival startups. It makes you look unprofessional and won’t win you any colleagues.
The nuts and bolts of emailing investors
No matter how excited you are to connect with investors who seem ideal for your startup, resist the temptation to send a casual email. Follow these steps to send an email that gets the results you want.
Do your research
Never send a truly cold email. Instead, do your research and understand who you’re pitching. Make sure you know more than just the basics of the fund. Identify the fund’s main partners and try connecting with the junior partners instead. Junior partners tend to receive fewer pitches and have more time to consider new ventures, so they may be more open to your cold email.
Use a compelling subject line
Your first email to an investor could be the only opportunity you’ll ever have to get the fund’s attention. That means you don’t want to waste it by using an email subject line that’s easy to ignore or one that could end up in the spam folder.
If you’re emailing for the first time, make that clear with a subject line like, “Introducing [Startup Name], [brief description].” Keep the description to as few words as possible, since most email clients will cut off lengthy subject lines.
If you’re seeking funding for a later round, make that clear in the subject line, too. It can be as simple as mentioning your startup name and brief details of the funds you’re raising.
Start with a concise introduction
Start the email with a single-sentence introduction. It should concisely explain who you are and what your role is within the startup. There’s no need to get more detailed in this initial message.
Highlight the problem your startup solves
Next, introduce your startup. Rather than delving into company history or other details that aren’t pertinent, explain what your company does without devolving into jargon or buzzwords.
Take this opportunity to highlight the main problem your company is striving to solve and include a short description of the product or service you’re developing to solve it. Remember that your goal isn’t to provide details. Instead, you want to offer a concise overview of your startup, with enough information to pique investors’ interest. This should span three to four sentences at most.
Explain how your startup provides value
After discussing what your startup does and how you plan to do it, you need to explain how your startup provides value and how you’ll make money. To make this key information as clear as possible, many startups opt to use bullet points to call out these particulars.
Mention the growth potential of your market, the size of your company, the amount of funds you’ve already raised, or the traction you’ve already attained. If you’ve already launched a product or secured the support of notable founders, be sure to share this information.
List your startup’s credentials
Most investors don’t have time to read your startup’s entire back story, but you should include a few brief details that illustrate why your company is worth the investment or why you know your industry so well. If you graduated from a top-tier university, or you’ve already launched successful startups, this is the time to highlight how competent and driven you are.
You might consider leaving this off for funding in later rounds, but it’s important when you’re seeking seed funding. After all, most investors want to support a dynamic team with stellar credentials.
Provide a call to action
A great investor email should always end with a call to action, but take care to keep it reasonable. Refrain from closing the email with a request for a major investment, and try a more subtle method for moving the relationship forward instead.
For instance, ask to set up a brief call and provide a relatively specific time frame. If the investor is interested in your startup, request a 10-minute call the following week, and make it clear what you want to discuss. Remember that leaving the time frame too casual may mean that investors won’t feel compelled to act right away, and asking for a meeting that’s too time-consuming is guaranteed to put off busy investors.
Include a pitch deck
Whether you have a warm introduction or you’re sending a cold email, you want to give investors everything they need in order to carefully consider your ask. Always include a link to your pitch deck or attach it directly to the email.
If your email gets investors interested, you don’t want to waste their time by forcing them to ask you for more information or for a link to your pitch deck. Instead, make it easy and include everything they need in your initial email.
As a general rule, investors are savvy businesspeople who know a thing or two about funding startups. They receive countless pitches, and they can spot fake data or deceptive information from a mile away. Never try to mislead investors, whether you’re sending the first cold email, or you’re providing the 10th monthly update. Always be prepared to offer evidence or provide proof.
After reaching seed stage, your work is far from over. You’re going to need support from your investors for the long term, and you need to build trust along the way. Aside from meeting all of your objectives with flying colors, the best way to do this is to keep your investors updated on a monthly basis.
Use a standardized format that highlights all the key points they need to know. Outline your top priorities for the month, summarize product updates, provide a brief financial update, and list your key performance indicators (KPIs). Limit substantial requests to one per email to keep things concise and to the point.
Remember to maintain a standard frequency for investor updates, which means emailing them even when you don’t have good news to share. You need investors to trust you, and they may have helpful advice or groundbreaking solutions to help you move forward.
Whether you’re sending your first or your fiftieth email to investors, make note of these tips. With these strategies, you can communicate effectively and build lucrative relationships.