Approaching investors can be one of the hardest things for startups to do. We sat down Seedcamp partner Tom Wilson for the latest episode of The Pitch podcast. Tom shared some incredibly useful advice on what they’re looking for in founders, how the process works and how you can approach investors.
Seedcamp‘s made 250 investments since 2007, including headline-grabbing successes like Transferwise. I’ve shared a number of the highlights below or you can listen to the whole episode.
It’s normally possible to identify investors in the space you’re building a company in. They will have a thematic focus or experience supporting similar companies. Investors are very active on social media, blogging and hosting podcast. Those channels will show you areas that investors are interested in.
Always try to find a connection when you are reaching out cold. You can talk about an article they wrote and why you liked it. Don’t make the ask too big. Don’t just ask to get a coffee. As investors your inbox can be overflowing with random cold outreach, which has a low success rate. But if you can find the connection you’ll have a lot higher success rate.
Investors like compliments. If you’ve seen them speak on stage or you like their content it provides a way to make it relevant. Twitter is a fantastic platform to engage on too.
One of the characteristics founders need is the ability to build networks. It’s hugely important for entrepreneurs. It’s a very tough thing to learn and you need that ability to make connections across the business.
When we’re thinking about any opportunity we’re broadly thinking in three buckets of team, market and product. If it’s an unlaunched product in a pretty good market, the team is going to have to be very high on the judging scale for us to build enough confidence to make an investment. If the product is fantastic and is getting traction the team, while it’s always important, is validated by what they’re able to achieve. There’s no perfect answer.
We closed a new fund last year for £41m, that’s likely to increase to £50m. We’re going to make around 90 investments in the next couple of years so it’s definitely a good time to be speaking to Seedcamp.
Tom’s suggested reading list
Here are the book and podcasts that Tom suggests listening to at the end of the episode.
- EBoys: the First Inside Account of Venture Capitalists at Work
- The Knowledge Project with Shane Parrish
- This Much I Know, the Seedcamp Podcast
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