Forget everything you’ve heard about raising funds from investors. Whether it’s about researching investors or how to find and approach quality investors, it’s not the information you need to raise funds efficiently.
For example, one common piece of advice is to research investors. While this might be true in some cases, it’s often unnecessary. Some investors want to be admired, hearing 20 entrepreneurs a day praising them. But fundraising is nothing more than a numbers game—the more investors you contact, the higher your chances of raising funds. Stop wasting time researching individual investors. If you’re raising $1,000 in pre-seed money, why spend time researching when you need money to build your product fast? Your priority should be contacting as many investors as possible.
As for the idea of building relationships with investors until the time is right for them to invest, I call BS. I’ve never seen it work. It didn’t work for me when I raised funds, and it didn’t work for the startups I coached. We contacted investors regardless of their typical investment behavior, field, or whether they were even focused on startups at the time—and we got funded. There are exceptions, but if you’re an early-stage startup and want to raise funds fast, stop wasting time on research. If you have access to investor data, contact them all. (By the way, we provide that data for free to our subscribers at InvestorNations.com.) I’ll teach you how to reach out and make it easy. But first, there are a few things you need to understand about the fundraising process.
Number one: It’s a numbers game.
The more investors you contact, the higher your chances of raising funds. This means reaching out to at least hundreds, if not thousands, of investors daily. Use automation tools to increase productivity. There are ready-made tools on the market that can automate your outreach, sending emails and follow-ups when unopened. Investors often need to see two or three follow-up emails before they respond, so it’s essential to automate this process. Send the second email four days later and the third three days after that. Interested investors will get back to you, and you can begin the conversation. Even if the response rate is only 5%, it will keep you busy. It’s all about the numbers—the more investors you contact, the better your chances.
Number two: Don’t select investors.
It doesn’t matter if their website says they only invest in Series-A or in a specific field. You don’t know what’s going on behind the scenes. For example, a US fund considered starting a new vertical for pre-seed startups. A startup contacted them without overthinking, and two months later, they were ready to invest. Another time, a fund passed on an opportunity, but one of their limited partners reached out to the startup directly and made an investment. Remember, you’re dealing with people, and they have their own interests and plans. If you approach a group of investors, it only takes one person to like your idea and move forward, even if the fund doesn’t. Don’t over-select investors—approach as many as possible.
Number three: Forget about building relationships.
I once coached a founder who introduced me to his co-founder. The co-founder told me they’d been building relationships with investors for 18 months and expected to get funded soon. I told them bluntly, “You won’t get funded.” The founder later called and asked, “Why do you think that?” It’s simple: if an investor hasn’t committed to you in the last 18 months, they won’t in the next 18 either. Investors are hunting for good opportunities. If they see potential, they’ll act fast. If not, it’s time to move on. Building relationships is a waste of time. Investors want to make money. They won’t waste time if they think you’re not the right opportunity.
Speed up your fundraising by playing the numbers game.
The more investors you contact daily, the better your chances of closing your round faster. For example, I coached a North American startup that raised $300K in pre-seed funding within 90 days, with just a solid pitch deck and no product. We reached out to nearly 20,000 investors using automation—without selecting and without building relationships. Don’t waste time on fruitless efforts. Focus on building your product, because that’s what investors want to see—they know that’s how their money will grow.