Find an Investor
There are 2 types of entrepreneurs looking for money in SV: those „in the game“ and those not. You are „in the game“ if you are a known entity already in the VC community or you know people who can make the relevant introductions to VCs. Unlikely someone in this group is even reading this. For all else, the following holds true:
It’s a lousy process
What you need: investors who are currently investing and who are in principle interested in your business area. Unfortunately, many investors do not openly provide either information, and some actually provide misleading information. They do so to stay in the game (even if they currently do not invest) and to avoid missing anything or looking bigger than they are even if their actual search pattern is extremely narrow (which it often is). As a consequence, thousands of ventures waste hundreds of hours each researching and contacting investors that, regardless of what they present, will not invest in their venture – in fact, in many cases will not even look at the first page of whatever they send.
Looking for investors in SV might well be THE most inefficient process you will ever encounter in your professional life. We at SVNavigator are here to help you make it more efficient.
How many investors should you contact?
Assuming your venture is fundable, expect to contact 50-100 (or more) investors before you get a term sheet. Many highly successful companies got declined more than 50 times before they got funding. Yes, these are large numbers, and it means a lot of work and time. Of course it would be enough to contact the 20-30 most relevant investors (i.e. those currently investing and interested in your topic), but if you don’t know them, the above number is what you have to go through.
Two points need to be made here about VC firms:
- Some VCs operate as a franchise rather than an integrated company: the partners are more or less individual investors. If you send your pitch to partner A, but the topic would be much more relevant and interesting for partner B, it may not be the case that partner A hands your case over to partner B. To the contrary, A may decline as not being interested in this topic, while B would take it up. But you may need to get in touch with B for that separately.
- In many VC firms, a typical partner will personally only do 1 or at most 2 deals per year. That’s it. It means two things: first, they spend a long time before they commit to a particular deal. Second, if they are done for the year, they will not easily jump on another one.
Where do you find investors?
|Angel Money||Seed Money||Series A|
|You have …||Idea / working on solution / prototype||prototype, initial market feedback, pilot customers||Product launched, paying customers, clear traction and proof of scalability|
|Your KPIsa are …||no revenues||revenues < $1m-$2m||Revenues > $1m-$2m or >1m monthly users|
|You can get …||$25k-$500k||$200k-$2m||$3m-$15m|
|Look here for investors (selection) …||
If all you need is a long list of US investor names, take a look at the member list of the National Venture Capital Association.
You can create a list on your own by googling – just takes a lot of time and work. You can also use our curated lists – they save you a lot of tideous, boring work. Or you can let us help you nail it down right away to the relevant investors to talk to. This can save you months of time and work. Talk to us about it.