Find Your Ideal Investor In 5 Easy Steps
When you’re going out to market to raise money, remember to always save your best for last.
But how do you know who your best are?
Here are my favorite tips to find the ideal investor for your specific business!
Remember — investment firms are as different and varied as startups themselves.
To an untrained eye, every “firm” is the same just like every “startup” is the same.
After some light research, you can easily understand the wide variety.
Know what industry and stage they usually invest in to prevent wasting your time or theirs. (Dave Payne agrees.)
These tips apply to any stage but if you’re looking for your first money in, check out 6 ways to find funding to get the creative juices going!
5 Ways To Find Your “A List” Investors
1. Start with the Good Ole Internets.
Going to lump a lot of things into one category here but basic Googling or ChatGPTing is your friend.
Crunchbase, PitchBook, and other investment database websites are very helpful.
LinkedIn and Twitter — probably better for deep dive research than finding net new investors but definitely check them out! See who is talking about investing or a thought leader in your space.
Things to pay attention to when vetting a firm:
what stage they typically invest in
average check size
industry focus
traction milestones they look for (revenue, users)
business model focus (B2B, marketplace, consumer products, hardware)
other preferences (location, demographic, founder criteria, ownership, lead/follow)
Don’t forget to look at strategic investors depending on your stage and industry. They often fly under the radar but can be a great option!
2. Ask other entrepreneurs.
Find out who they recommend, spoke to, **AND ALSO** if they had a list they used.
Lists from fellow entrepreneurs often have notes or additional context (plus save you hours of work)!
Even better if they are in your industry or business type.
If one of their investors is a fit for you, ask for an introduction!
3. Look at competitors or companies you admire.
You’re building a subscription-based makeup company? → Who were the first investors for Stitch Fix or Birch Box? Add them to your list!
Who is someone that recently raised in your space that’s not a competitor? → Who invested? Who else did they talk to? If you’re not competitors, people are usually happy to share this info.
Who did your biggest competitor raise from? → They probably won’t invest in you but that’s a good starting place for research.
What is their investment thesis?
What other companies are in their portfolio?
Who were those companies’ other investors?
What terms or language do all these investors use to describe what they do?
Follow the breadcrumbs to further customize your list and find other investors in your space!
4. Check out industry events.
In the Southeast, Venture Atlanta is the largest investor/startup event. Are there investors in attendance who match your stage and industry?
If your business isn’t B2B SaaS or Fintech (two favorites of the Southeast), what are the top consumer products, robotics, marketplace, or mobile app events?
Or maybe you target a specific vertical — what are the best aviation, solar panel, or manufacturing events? Investors will attend those looking for talent and new products.
Who is posting, speaking, or sponsoring those events?
Know someone attending? Maybe they have a copy of the attendee list they could share with you…😉
5. “Who should we be talking to?”
This is your new favorite question.
Ask your mom, the grocery store cashier, your kids’ friends.
Okay, maybe not them.
But definitely other investors, mentors, founders, anyone in the startup world! Most times, they won’t know someone or it’s someone already on your list. But every so often, they’ll have an “A List” gem for you!
DIY Project
I love interns (as you know) and they can be a great resource to get a list started.
BUT YOU CAN’T DELEGATE THIS COMPLETELY.
The learning from the research is invaluable.
You will start to know the firms, lingo, trends, people, and inner workings of VC.
You’ll get a feel for the firms you like the best, current fundraising economics, how companies are positioning themselves, and more.
Compile your “ideal list” while you’re fine tuning your pitch deck (especially that $$ and TAM) and let the fun(draise) begin!
Remember — don’t start your fundraising process with your ideal investors! Start with friendlies who are not a fit. Save your best for last so you’ve perfected your pitch by the time you speak to them.
Now that the summer slow down is over (hellooooo school year), we’ll share more fundraising tips and process advice in the coming weeks!
What other suggestions do you have for founders compiling a list of potential investors? How did you find your target investor list?