3 Steps To Make Investors Know Who You Are

This week's tip: 3 Steps to become a known founder

VCs are very adamant at collecting data on their investments. At my old fund, Octopus Ventures we were no different.

One of the data points that shocked me the most was how and where our investments come from:

Over 70% of the investments we made came from founders who we already knew of.

And when speaking to other investors about this, I found out it was the same for them too!

This show me the unfortunate reality: very rarely will you be able to fundraise for your start-up if you aren’t ‘known’ already.

It’s why first-time founders find it so hard.

Because the first few meetings is about the investor trying to find out about them.

Whereas for successful founders the investor has already met them. They’ve seen them execute. They trust them.

Here are 3 steps to make sure you are “known” to investors:

Step 1: find out your unique insights on your industry

A large part of an investor’s job is doing preliminary research on a topic they find interesting. For example, when I was a health investor, I focused on two areas:

• Mental health, e.g. cognitive behavioural therapies
• Tabboo subjects, e.g. women’s health 

My spare time was spent researching these topics with a large part of that finding and speaking to domain experts.

A great example is Andrea Berchowitz, Founder of Vira Health. She has a TedTalk with over 1.6 million views.

She has become the domain expert in her industry and owns that conversation.

No wonder we invested into her when it was time for her to raise; she was already on our list!

Your goal should be to show and build an aura of domain expertise around you. The best way to do this is to create your own spiky point of view on your industry.

Find out what your unique insights of your industry is, then tell everyone about it by using step #2.

Step 2: build an organised PR campaign showing your domain expertise

There is conflicting information of how much you should spend on PR for your company at the early-stages. I do understand why people say it can be a waste of time and money, and a large part of it can be.

But if you do your PR right you can make yourself ‘known’ for pretty much free. (It’s why I’m so against founders who are in ‘stealth mode’.)

A few steps to improve your PR:

• Focus on getting into “top X start-up in this industry to look out for” articles
• Focus on industry events & deep-dive blogs (the right investors will find you)
• Focus on improving your PR with industry experts and build your networks with them

An example of this being done right was with a company called Quit Genius, who I led an investment into. I had been tracking the company for over a year due to their PR campaigns. This made me reach out to the founders myself (through a warm connection no less!).

I knew I wanted to invest into them before they even started their Series A funding round.

Now…

If you do your PR right, you should be considered a domain expert and be attracting investors to message you.

Where I see a lot of founders fail is keeping those connections warm.

Step 3: Structured long-term relationships

So...

You have investors who have researched you and some even reached out to speak to you. 

What do you do now?

Most of you do nothing. Crickets. Never to be heard of again.

But this is where you can win. By doing what most founders fail to do, play the long-game with structured relationship building.

You  need to show these investors you are three things:

- Building the opportunity of a lifetime

- A domain expert

- An executor

Here’s 6 steps to help you build out a structured relationship:

1. Speak to the investors who you have met (or done cold outreach to). TELL THEM YOU ARE NOT FUNDRAISING

2. Reach out for a quick coffee. Be personal in the meeting and make sure they know you have researched them

3. Give value back first. This can be through a network connection, novel thoughts on your industry, events. Be specific on the areas you need help on after this

4. Your goal on the coffee chat is to make that person want to speak to you more or ‘keep track of you’. DO NOT TRY AND MAKE THEM INVEST ON THAT DAY

5. Add them to your investor update list. Ask them if they would be willing to meet every 2-4 months as a catch-up (depending on what your execution timeline looks like)

6. Every investor update email, and every time you meet up as a catch-up: your company should have moved at lightning pace. New users, new product, new hires. etc. Your goal here is to make them gobsmacked at your execution pace and your unique insights.

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Do these 3 steps and investors will have met you multiple times and trust you can execute on your vision.

That’s where the real fundraising gets done.