Be Meticulous About Your Investor Funnel to accomplish Funding Success

Fundraising is similar to sales – it really is numbers game, in fact it is best attacked with a solid funnel. As a founder you concentrate on first identifying the proper investors, then getting introductions and lastly working through the funnel with each investor.

You can manage the procedure using two spreadsheets, one for potential investors and the next for the investors you are speaking with.


Getting introductions.

Setup these columns for the first spreadsheet:

  • Investor name
  • Affiliation (individual angel, an organization or venture firm)
  • LinkedIn profile (handy for introductions)
  • AngelList profile
  • Partner fund page to see current investments
  • Related investments
  • Focus area/verticals that interest this investor
  • Typical check size
  • Investments each year
  • Notes of whatever you found interesting or relevant

Once you setup this spreadsheet and filled it out, you should work out how to get the introductions. It isn’t smart to touch base cold. Instead, you should touch base through your network of other founders, advisors, and mentors. Decide on a band of five to seven those who are ready to help. Add the names of the folks as columns to the spreadsheet above. Then ask all of them to undergo and put [x] next to the investor they are linked to and may introduce you. From then on, you can send appropriate individual introductions.

Unless you have mentors or other founders who are prepared to help, use LinkedIn and Conspire to locate a way to each investor one at a time. Put in a column called "connection and connection notes.” Then send individual asks and keep an eye on when you sent and what the response is. Iterate through the list weekly. Try to proceed through a different connection if the main one you selected was not fruitful.

Getting introductions is a big area of the whole process. Get the perfect introduction to each investor and track your response rate closely.


Tracking conversations.

Once you get an introduction to an investor, enter them right into a separate spreadsheet organized by stage of the conversation. This spreadsheet is similar to a sales pipeline. New conversations are at the top and conversations that are moving along are in the centre. Commits and passes are on underneath.

Add these columns:

  • Investor name
  • Affiliation – Individual angel, an organization or venture firm
  • Check size
  • Process – typical process so you can get to a check
  • Status – state of the conversation
  • Next thing – what’s next and who’s running with it – you or investor?
  • Last touch point – last date you met, talked or returned a contact
  • Who introduced you – vital that you thank them later / keep an eye on best intros
  • Notes – any other activities you found interesting / relevant

Ultimately of the first meeting, always ask if the investor is interested. If they’re, enquire about their process and the next phase. That is critical. Having clarity on the procedure is essential to determine when you are continue or not. For instance, some firms perhaps you have met with one partner, then with two partners and execute a partner meeting. Some angels decide after two meetings, etc. Having clarity on the procedure permits you to have far better notion of the potential outcome.

Keep an eye on what your location is and move conversations through the pipeline weekly. If investor isn’t responsive for some time assume this is a pass. If the investor does diligence, ask how long they be prepared to do it. Basically, proactively manage all areas of the process and become in charge.