Thoughts about introductions strategies for fundraising
Raising funds is one of the toughest jobs you need to do as a startup founder, especially during the beginning of your journey.
In this post, I focused on the approach part of the process, and investigated one of the worst mistake that I made at GoDisco- giving up on introductions.
We all know how efficient a good intro can be, and how we can benefit from it. Actually, that’s the exact reason that I, as well as almost every businessman, work so hard to create a large network of connections.
Over the past year, I managed to connect and create new amazing friendships with a lot of great entrepreneurs, businessmen and investors. However, when I started my fundraising round, I found that it was harder than I thought to manage them to get intros; mainly because I was lacking a clear strategy.
Lacking of strategy problems
- You can’t ask for too many favors - you can only ask for one or two favours in a while; more than that and people might start to ignore you.
- Your success depends on luck
- You don’t really know who can help you
- You losing patient, and start cold mailing - TL;DR: cold mails are usually a bad idea, unless you are a celeb or something.
Planning your strategy
Planning your strategy can help you to gather more control over the process, and create meaningful introductions.
When I started to write this blog post, I first mapped my connections in order to realize how I should act:
I noticed that I can split my contacts into the following groups:
- Not relevant(0) - friends that cannot help me with my goal, or contacts that don’t really know me.
- Friends(1) - friends that will help me, but they not very close to me- so I need to be very specific with them, and to minimize their favor to only one request.
- Good friends(2) - well-connected friends that will connect me to their relevant contacts without hesitation; some of them might even spend some time planning the introductions with me.
- Need intro(N) - people I determine that I need an intro with, but I don’t know them; can be either on my contacts or not.
Generally, there are two strategies I use that can help us here:
- Finding all the intros that contact can made
- Finding all the contacts that are relevant for the investor.
Intros by contacts
Just contact your good-friends(2) and ask them who can they connect you with.
Finding intros to an investor
List all of the potential investors that may interest in your opportunity, whether you know them or not, then narrow down the people that can introduce you to them(friends levels 2 or 1). After you list all the possible connections you’ll need from a specific contact- approach him.
∗ Don’t waste your time on getting intros to investors who probably won’t invest in your company (not in your field, etc.).
∗ You can probably ask for only a one favor from a friend on level 1, so ask it once for all the intros, and avoid splitting your requests.
How to build your plan
The hard way - manually exporting your contacts
You can export your Facebook/LinkedIn contacts list to excel, then just start to “filtering” them into the appropriate friendship level(as explained above), and realize the map of the connections.
The easy way - My tool: Actionable connections
After I started writing this post, I realized that its quite difficult and very consuming to apply both of the strategies and to organize your contacts into an actionable plan. So I decided to build a simple tool that can help you to organize your LinkedIn contacts into an actionable strategy.
This tool can make your job very easy: after you logged in with your LinkedIn account, the tool helps you to “flag” the contact by his friendship-level. Then, the tool creates a customized report that shows you what to do in order to achieve your goal, and to get the relevant introductions.
∗ This tool does not saving any data on any server, and all the processing is actually done by your browser end, so your privacy is completely safe :)
∗ I’ve published the “Actionable connections” tool as open-source, so feel free to fork it or use it to add integrations.
Keep track on your process
I highly recommend that you track your progress by documenting EVERY SINGLE INTERACTION (either with the connections
or the investors), and describe the whole fundraising process as a pipeline.
You can even manage the pipeline by using CRM such as pipedrive, like I did.
Well, that’s all for today. As always - I’m inviting you to comment below, and to share this of course.