Do You Need a Warm Intro to Investors? It Depends on the Type of Investor.

The 3 Different Types of Startup Investor and the 3 Different Ways to Reach Them

Photo by Vitaly Gariev on Unsplash

As these things frequently happen, a fight broke out on LinkedIn about the only way to reach investors.

A pompous VC was ranting that cold outreach doesn’t work and founders should just stop. Don’t do it, he shouted to the universe of startup founders. Without a warm intro, he claimed, founders were wasting their time.

I butted in, as I often do, telling him he was flat wrong. In fact, warm intros are entirely useless for reaching out to angel groups.

Random and irrelevant comments ensued. It’s difficult to illuminate a complicated topic with a 2 sentence response.

This is a critical question, though, perhaps the most important one for founders — how can you reach investors? The answer depends on what type of investor you’re trying to reach.

There are 3 different types of investor. Each requires a different way to reach them:

• VCs
• individual angels
• angel groups

Reaching Out to VC Funds

As the original poster, a GP at a venture fund, stated, cold outreach to the partners and associates at a decent-sized fund is a waste of time.

Some funds have a contact form to send them your pitch deck; most don’t even bother. Emails to partners, text messages, LinkedIn — all gets ignored. Anything other than a warm intro from a trusted source goes straight into the trash.

Think you have the perfect pitch for a16z? Khosla? So do ten thousand other founders. For large VCs funds, it’s don’t call us, we’ll call you.

So how do you get them to call you? Start by building success. Get customer traction. Grow quickly. Become the center of a new industry. Generate FOMO. If you’re doing well in a super-hot sector like AI, they’ll find you. Oh, you want a shortcut to getting their money now, not when you reach Series B in five years?

In that case, your only hope is a warm intro. But it truly needs to be warm — an investor in your startup who knows someone at the VC personally.

I know a handful of VCs and CVCs well enough that I can shoot over a pitch deck and say, “Hey Vera, is this something you might be interested in?”

My other 20k connections on LinkedIn? Not useful. Random people I met at a demo day 5 years ago or connected after reading a post. For those contacts, an intro from me isn’t even lukewarm, it’s arctic cold. My outreach will be no better than your own, especially if I’m not even an investor in your startup.

The biggest mistake, though, is expecting VCs to invest at pre-seed or earlier. If you have a warm introduction, great. You might get a chance to speak with a partner who will tell you the same thing, but in a more polite manner. It can’t hurt. It’s good investor discovery. They might even tell you what milestones they require before investing. But they’re not going to fund your business now. So don’t waste your time trying to find warm intros to reach them.

Before that, it’s angels and angel groups.

Reaching Out to Individual Angels

Long before VCs will write you a big check, your most likely source of funding besides friends and family is small checks from angels. And here’s where Mr. Pompous VC was dead wrong.

Unlike VCs, cold outreach can be effective to reach angels. Warm intros, of course, are always better, but many angel investors like me will respond to a personalized, well-written cold intro for a startup in their area of interest.

The key, here, though is “personalized”, “well-written”, and “in their area of interest,” Because 99.7% of the outreach I receive is not.

You have to approach angels as individuals. Most angels, especially at the very easiest stages, don’t even consider themselves to be investors. They won’t have angel investor in their profile, and you won’t find them on pitchbook or packaged lists of investors.

Unlike later investors, they won’t invest in your startup because they think it will generate a 100x return on their money. They’ll invest because they get what you’re doing and want you to build the solution to their problem. They might be customers, might be suppliers, or might be industry professionals. They’re closer to friends and family than financial investors.

If you’re building a lawtech startup, find a dozen lawyers to invest $25K each. A medtech startup — reach out to doctors. AI for restaurants — get restaurant owners involved. If they’re not interested, it’s a strong signal your startup isn’t solving a critical problem for your intended customers.

Where will you find those investors? Well…the same place you find customers — personal connections and introductions, industry events, and yes, cold outreach on LinkedIn or by email.

But a cold call saying, “I’m building an AI for Lawyers startup, can I send you a pitch deck,” will be greeted with silence. At the earliest stages, we’re not throwing money at founders. We’re joining your journey. You can’t start with investment. You need to start by building relationships. That means finding people whose advice, guidance, and assistance you value, whether they decide to invest later or not.

Before reaching out, understand what we’re interested in. Then craft a short, personalized message about why we should be interested in your startup. Follow my outreach tips here.

Later, after you have customer traction, you’re ready for angel groups.

Reaching Out to Angel Groups

Rather than trying to get 40 angels to each write a $25K check, it’s far easier to get 4 angel groups to write $250K checks.

And here is where Mr. Pompous VC is 100% wrong. Because for angel groups, warm intros get you nothing.

I am VP of Chemical Angels and on the executive committee of Tech Coast Angels. In both roles, I’m frequently asked to take warm intros with founders. I’ll look over a pitch deck or have a short zoom call. If I think it’s relevant for the group, I’ll tell the founders to apply online.

But whether I think it’s relevant or not doesn’t matter a whit. Once the application is in the system, it goes to the pre-screening committee which will vote on whether to bring it to a full screening, and after screening, the members vote on whether they’re interested in learning more or not. Despite my executive role in the group, I’m just one member out of a hundred.

So don’t waste your time on outreach, whether warm or cold. Just go to the website and apply.

Does Cold Outreach Work? Do You Need Warm Intros?

What kind of outreach works depends on what type of investors you’re trying to reach.

For VCs, don’t bother with cold outreach. In fact, until you’re ready for Series A, don’t bother with VCs at all.

For angels, warm intros help, but well-written cold outreach can land, too.

For angel groups, warm intros get you nothing. You have to apply to the group and proceed through the screening process.

For all investors, though, a warm intro is not an email from someone I met at a conference seven years ago saying, “Hey DC — here’s a deal you might find interesting, can I introduce you to the founder?”

A warm intro is another investor who’s spent weeks in diligence before writing a check, and is inviting me to join her. And those are the only introductions that matter.