Should You Cold Email Investors for Your Startup?

"Cold emailing is for losers". If you've been raising funds for your startup, you've probably heard it. But is it true?

Stephane Nasser
Stephane Nasser
Founder of OpenVC

"Cold emailing is for losers. Warm intros are the way." If you've been raising funds for your startup, you've probably heard this.

As the founder of OpenVC, I've helped 1,000+ VC firms expand their deal flow by being more open. I've also screened countless startups and routed them to the right investors.

Let me share with you a few things that I've learned.

There are 3 ways to reach an investor

Typical case: you're raising a seed round for your B2B SaaS startup. You have a solid team, you're growing nicely (30% MoM), and getting close to $20k MRR.

There are 3 ways for founders to reach investors:

  • Inbound: That's when an investor finds you and reaches out to you. Obviously, that's the dream scenario and usually a byproduct of building in public and being active in online communities. This is, as you can imagine, excessively rare.
  • Warm intros. When someone you know connects you to an investor you don't know, that's a warm intro. Investors tend to pay more attention to deal sourced through intros since they come from someone they trust and therefore, are likely to be a better fit and higher quality.
  • Cold outreach: You may choose to reach out to VCs cold - via email, LinkedIn or Twitter. Cold outreach has a bad reputation because investors receive such bad deal flow that they have learnt to ignore most of that deal flow. Meaning they won't even open your email.

So which channel is best? Answer: all of them.

You don't get to choose. Make a list of all the investors that are a good fit, then try to find an intro. You got one? Great, go for it. You don't? Cold email it is. It just doesn't make any sense to oppose the two.

And if your dream VC reaches out to you by themselves, more power to you!

If you cold email an investor, do it right

Let's face it: investors hate cold emails because 99% of them are trash. Be part of the 1%.

It's not difficult, but you have to be honest with yourself.

  • Are you VC backable? All venture investors are looking for some basics: experienced team, $1bn+ TAM, capital efficiency, scalability, PMF and significant traction, exit opportunity within 10 years. If you don't understand these terms, then you may need to do a bit of research first.
  • Is there a thesis fit? Investors are specialists. Some focus on post-revenue German fintech apps, others focus on Asian biotech. Do your homework, make sure that the investor you're contacting is actually a good fit for your company - and vice versa.

  • Do you have a strong positive signal? Even with the two points above, it's still hard to just get your email opened. You're going to need a strong positive signal to include directly in your email subject. For example:
  • "Exited founder" if you've sold your previous company
  • "Lead secured" or "n% secured" if you have committed investors for the round
  • "YC-backed", "Techstars-backed", etc. if you are part of these programs
  • Ex-Google, ex-Netflix if one of the founders has worked there
  • FDA-cleared if you are in healthtech and has been FDA-approved

To put it another way, which email do you think investors will open:

Email 1: "Startup raising seed - Pitch deck", or

Email 2: "HR SaaS - $1M ARR, +30% MoM - Seed (lead secured)"

So what now?

In a nutshell, cold emails and warm intros are both valid approaches. The whole point is doing it right: make sure that you are VC-backable with a strong thesis fit, and highlight a positive signal to get noticed.

If you match all these criteria, it's time to craft a killer cold email and attach a great pitch deck to it. I wrote a whole playbook on that topic, available here.

If you don't match these criteria, well… maybe bootstrap a little longer? You could join an accelerator to get to the next level, or raise funds via crowdfunding or angel investors.

Best of luck to you!