RTC #17: The ONLY investor list you will be successful with

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Headlines 📢

• This is the investor that invested in 14 unicorns over the last 10 years (without being a full-time investor)

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• USD 175m looks pretty cheap for me for an AI pre-seed these days…Fun times! 🦄

• Who is the largest single investor in the world? Hint: This fund manages 1.4 TRILLION DOLLARS!

• New VC funds investing in Europe 💸

  • Bitkraft Ventures, a global investment firm for gaming, Web3, and immersive technology, closed its third fund, Bitkraft Ventures Fund III, at $275m

  • Global Brain Corporation (Global Brain) and Kyocera Corporation (Kyocera) jointly established “Kyocera Ventures Innovation Fund-I” on April 1, investing in mainly Japanese and Asian startups

  • The Autism Impact Fund (AIF) has closed its first fund with $60 million in capital

  • Matter Venture Partners, based in the US, raises $300M first fund to invest in ‘hard tech’

• The European startups taking part in YC W24

🤿 The ONLY investor list you will be successful with

A few weeks back, I was having one of my weekly 30’ “Work-with-Stephan” sessions with a founder planning to raise a seed round.

Our original agenda was to fine-tune outreach strategies and tactics to ensure the right momentum in the fundraising process.

A short transcript from the start of our conversation 💬

Me: “Great, let’s get started! Before we dive into the different approach tactics for the various types of investors. Can you remind me of the status of your current investor relationships and how you came up with the investors that we are planning to approach?”

Founder: “Sure, super excited! My investor list is perfect - it’s called “the top 100 B2B investors for Europe”

Me: “How did you create it?”

Founder: “I was lucky - the list was shared on LinkedIn!”

Me: “…”

[Explanation: This is how I mentally pictured the source and quality of the investor list.] 😬

Me (after a pause): “Ok, got it. Let’s do the following and have a quick look first at the concepts of ‘Ideal Investor Profile’ and ‘How to build your investor list‘…

And this brings us to the topic of today’s issue (!):

Why?

Reminder below 👇

Unfortunately, many founders start their fundraising process and

• Believe a stellar pitch deck alone will attract investors and they are waiting for them

• Underestimate the importance of a well-prepared and tailored investor list (and outreach)

• Feel overconfident (and think that 1-2 of the first 10 will commit right away)

• Try to find investors while they are going through the round

This is why I wrote down for you the process of creating your investor list: step-by-step.

AND YES, IT IS WORK (quite a bit, actually).

I. Ideal Investor Profile

The speed and success of your round is directly related to how much you focus on your Ideal Investor Profile.

What you want to avoid is:

• 100x follow-ups “Checking in to see if you had the chance to look at our deck”

• Investor: “Sorry, but we do not invest in [insert your industry]”

Think of the “Ideal Investor Profile” concept as akin to your “Ideal Customer Profile”.

It takes work and turns to find them but some will be a perfect fit and worth actively seeking them.

Step 1: Create the basis

👉 Investment preferences of the investors

• Geography: USA, Europe, Germany only, etc (usually LESS flexibility)

• Industry: Healthcare, FinTech, etc (usually LESS flexibility)

• Vertical: B2B, SaaS, etc (usually LESS flexibility)

• Stage: Pre-Seed, Seed, Series A, etc (usually MORE flexibility)

• Check Size: Up to EUR 2m, EUR 0.5-5.0m, etc (usually MORE flexibility)

• Other: Revenue or profitability milestones, leading vs. co-investing, etc

➡️ Sources: Websites, Crunchbase, Pitchbook (best but expensive), LinkedIn lists (as a starter).

Step 2: Select your favorites

👉 Who can add value beyond just a check?

• Who are the investors that can have a huge impact in 5 minutes that would add massive value to your business?

• What kind of investor is most likely to add that value?

• Corporate VC: Does it have any impact on your strategic (EXIT) options?

• Family offices won’t push you to grow at all costs like a VC will, but what value could they bring to you?

➡️ Highlight the best fits on your list (and “practice” with others before approaching your top choices).

II. How to build your investor list

Yes, this is an actual list: Excel, Airtable, or your preferred tool.

1. Include the maximum number of relevant investors (especially your Ideal Investors).

2. Structure your investor approach and fundraising process.

3. Facilitate a tailored investor approach.

Maximum number of relevant investors

With your initial filters applied and all lists included, you should aim for 150-200 names. Consider "out-of-the-box" options to expand your list with additional candidates. Here are some ideas:

• Exited But Want Back In: VC that invested in a big competitor when they were at your stage, and subsequently exited (IPO / sold company).

• Left Out Last Time: If a competitor raised significant funds from Tier 1 VCs, many others likely heard the pitch and may have been interested.

Structure your investor approach and fundraising process

Incorporate milestones as columns in your list to organize the process:

• Contact person/details (email, LinkedIn, phone)

• Outreach started

• Follow-up

• Deck sent

• Call/Meeting

• Meeting notes

• NDA

• Term Sheet

Tailored investor approach.

So, this is work again - we are not finished yet.

Preparation is key, and a strategic and tailored approach is crucial:

It is a quality game and not about sending the most emails out.

The following details will help you tailor your approach in the best way:

👉 Relevant investment(s) (meaning in your vertical, geography, size, etc.)

👉 Research your contacts on LinkedIn and see who could provide you with an intro / is connected

👉 Relevant investor press releases/participation in conferences

And now…GET IT ON!

Helpful but not fundraising now?

Check out one of my previous issues and learn how to build the right investor relationships before you need the capital and start fundraising. 💰

👉 Investor Relations is not fundraising

📖 Infographic of the week

How fundable is your company? Check out the full report here.

📅 Calendar of main VC events in the upcoming weeks

“Networking is a lot like nutrition and fitness: we know what to do, the hard part is making it a top priority”

April
• Energy Tech Summit | Bilbao, Spain | Apr 10-11
• 0100 Conference Europe 2024 | Amsterdam, The Netherlands | Apr 16-18
• TechChill | Riga, Latvia | Apr 17-19
• eMerge Americas | Miami, US | Apr 18-19
• Startup Grind Global Conference 2024 | San Francisco, US | Apr 23-24
• VC Platform- Global Summit ‘24 | New York, UK | Apr 24-26
• TechCrunch Early Stage 2024 | Boston, US | Apr 25

May
• Data-Driven VC Summit 2024 | Online | May 5-8
• Private Debt Investor Europe Summit | London, UK | May 7-8
• Emerging Founders | Warsaw, Poland | May 7
• EU-Startups Summit | La Valletta, Malta | May 9-10
• Impact’24 | Poznan, Poland | May 15-16
• Mashup | Malmo, Sweden | May 15-16
• Tech.eu Summit | London, UK | May 16-17
• Finovate Spring | San Francisco, US | May 21-23
• Infoshare | Gdańsk, Poland | May 22-23
• Viva Technology | Paris, France | May 22-25

👉 Get the full list of events in 2024 here

This was it for today.

Did you like it?

If the answer is YES then you only have one task now:

👉 Share Road-To-Capital with 1 friend so that he/she joins our community 👈

The “Top 25 Most Active German VCs” are waiting for you!

See you next Tuesday,
Stephan 👋

Issue #17 | 9 April 2024