Writing a Cold Email to investors at the Custom MVP stage

Looking for guidance in writing a cold email to an investor? Our guide contains hints and tips for creating an outbound email that will help you get results. Getting potential investors to find out about your new startup can be a challenge. In the US alone, 4.35 million applications for new businesses were submitted in 2020!

This means if you want funding from angel investors or venture capitalists to move your new business forward, you need to take steps to make investors notice who you are.

One of the easiest and most cost-effective ways to make investors aware of you is to send them a cold (often referred to as an outbound) email. 

In fact, Dhruv Ghulati, the founder of Factmata, received a $500,000 investment from entrepreneur Mark Cuban, all by sending him a cold email.

Sending an email to someone you’ve never met before can be daunting. However, it doesn’t have to be.

We’ve put together a guide for sending a high-quality cold email to an investor that will not only help them learn more about your business but entice them to invest.

Top 10 tips to reach investors with a cold email

1. Keep your cold email to an investor short and simple
2. Have a good subject in line
3. Personalize your email
4. Include 1 strong call to action
5. Be confident
6. Use mail-open trackers
7. Follow up
8. Follow up again
9. You need to follow up with this guy
10. and again, don’t give up – follow up 🙂

Let’s go in detail through every point:

1. Keep your cold email to an investor short and simple

Let’s go back to the email Ghulati sent Cuban to get funding for his business. This is the initial cold email he sent:

Dear Mr. Cuban,

Apologies for my cold message. I am the founder of a Google-backed startup called Factmata that uses artificial intelligence to perform automated fact-checking and referencing. 

We are a team of three NLP researchers and scientists with 30-plus published and cited papers within natural language processing, question answering, and information extraction. 

I am currently fundraising from people who care about the problem of online misinformation, want to reduce mistrust in the media, and change the way we consume online content. 

I would love to tell you more about us if of interest, especially given your recent public discussions about this topic.

Look forward to hearing from you soon,

Best regards,

Dhruv

Including the salutation and signoff, the email comes to a grand total of 114 words.

What does this mean for your startup? Keep your email as short as possible. That way, it will be easier for the investor to read through and see what it is you want from them.

HubSpot recommends you should keep emails below 125 words.

As well as keeping your email short, use paragraphs and bullet points to break up the text and make it more scannable. If your prospective investor opens your email and sees a wall of text, they are very likely to pass on your email, as well as your startup.

Additionally, try to avoid jargon and buzzwords where you can. It may be the case that your investor of choice works in your industry and understands the specific terminology. However, this is not always the case. 

Even if the investor understands your industry, it may be that the email is opened by a personal assistant or company administrator who does not share the same industry knowledge. 

Don’t take your chances.

2. Have a good subject line in your cold email

The average American receives about 126 emails a day. In the case of an investor, they likely receive more than that!

This means that your subject line can be the difference between your investor reading your email and sending it to their junk folder.

Ideally, you should spend just as much time on your subject line as you do the main body of the email!

Our top tips for crafting the perfect subject line include

1. Personalizing the subject line to include the investor’s name and/or company can be beneficial. Emails with personalized subject lines are 22% more likely to be opened. More on personalization a little bit later on in this article
2. Keep your subject line short – ideally no more than nine words
3. Top load your subject line by having the most critical information at the start. That way, if your investor is looking at your message on their mobile, the most important info won’t be cut off
4. Avoid using all capital letters – LIKE THIS. Not only does it look like you are shouting (never a good look), but it may also set off your investor’s spam filters
5. Never use RE: or FW: to imply you have already communicated with the investor. This is a commonly used sales trick, but it can do more harm than good and damage trust before you even start communicating with each other

And sure, some of our favorites:

1. Keep it simple. For example, consider “{Investor name}, I want to share an idea with you.” It’s clear, short, personalized, and enticing
2. If you’re stuck for inspiration, try writing ten subject lines and reading them aloud. Which one would you be most likely to respond to?

We’re often asked if emojis work in subject lines. The honest answer is that it depends on to who you are sending your cold email to. Some investors like them; others don’t. 

If you decide to give them a try, stick to one in your subject line and bear in mind that emojis may not render on your investor’s phone or computer. This means you shouldn’t use them as substitutes for words in case the investor cannot see them.

3. Personalise your cold email

We’ve seen a lot of startups try to get investment by finding a list of all the investors they can online, and blasting them with one bulk email. 

Please don’t do this.

An impersonal email that has been sent to a hundred other investors is highly unlikely to work. If you’re looking to create an email that your prospective investor will want to read, try some personalization.

Nine out of ten people find personalized marketing content appealing, which means it will increase the chances of your investor wanting to find out more about your business.

Things you can do to your email to personalize it include:

1. Including your prospective investor’s name (and spelling it correctly!)
2. Adding a little bit of information you’ve read about the investor. For example, could you congratulate them for investing in a new business or for joining the board of another company? A quick search of Google or the investor’s LinkedIn profile will help you find what you need
3. Mention a few things that you have in common. For example, did you go to the same college or support the same sports team?

Knowing the personality of your investor helps when drafting your email too. For example, an investor with a fun-loving personality will need a different approach than a more introverted investor who is interested in financials.

Doing your research may take a little longer, but it’s more likely to result in a positive response for your startup in your cold email to an investor

4. Include one strong call to action

When you get in touch with a potential investor for the first time, you may be tempted to throw everything into your email, from videos to brochures, and even a copy of your pitch deck.

You may think that the more information you can give about your startup, the better. However, in reality, putting a lot of content in your email can be highly counterproductive. There is something called ‘choice paralysis,’ which is when someone can’t choose between all the options they are given, so they end up doing none at all.

A store did an experiment where they let shoppers sample 24 different types of jam and six different types of jam. As a result, 30% of shoppers bought when there were six types of jam to choose from, compared to 3% in the larger sample.

When you send a cold email, your primary intention is to pique the investor’s interest, so they want to know more. So, leave out all the attachments and stick to asking them if you can arrange a phone call or Zoom call to tell them more about your business venture.

5. Be confident

Investors want to work with founders that make good decisions and know what they want. You want this confidence to show in your initial email.

You generally have two seconds to make an impression when you send an email, and you need to make every second count!

Here’s how you can come across as confident when you hit the send button:

1. Don’t say sorry or apologize for wasting the investor’s time
2. Avoid hedge words like ‘potentially,’ ‘possibly’ and ‘quite’. This can make you look like you don’t have confidence in your product or service
3. Avoid exclamation marks – they can make you sound unsure of yourself
4. Keep your email concise. Reading your email aloud before you send it can help you decide what to cut
5. Don’t overdo it or use the email as an opportunity to tell the investor how great you are. There’s a fine line between sounding confident and sounding arrogant

6-10. Don’t be afraid to follow up

You may be worried that your prospective investor may think you are being pushy if you follow up on your email. The truth is, investors are very busy, and they may not have just gotten around to actioning your initial inquiry.

You can boost your reply rate by up to 66% by sending a thoughtful follow-up email.

If you want to send a follow-up email, here is some guidance on doing it right:

1. Be polite – don’t be passive-aggressive or accuse the investor of ignoring your email
2. Don’t leave it too long; otherwise, there’s a good chance the investor will have forgotten about your email. Five to seven days between the first and follow-up email is an ideal length of time. Conversely, don’t send a follow-up the very next day, as you may come across as impatient
3. Add a little additional value to your follow-up email. If the investor hasn’t responded it may be that they aren’t interested, but sharing some extra benefits could catch their attention
4. Don’t mark your email as urgent. This can come across as annoying
5. Use the same email subject line and attach a copy of your original email, so the investor has all your information in one place

In summary – be bold, be brief, be brave

Drafting a great cold email can take time, but the payoff can be incredibly worthwhile if it works.

Interestingly, many investors wish that startups would email them more often! In a tweet from last year, venture capitalist Andrew Reed advised that the odds of sending a speculative email are often in the startup’s favor, yet many founders don’t send them.

Just send that cold email to an investor… what have you got to lose?

Let’s recap the tips we’ve discussed in this article:

1. Keep your email short – 125 words or less
2. Spend time crafting a catchy subject line
3. Do your research and personalize your email
4. Focus on one call to action and leave the attachments for another time
5. Let your email show how confident you are
6. Be professional and polite when following up

If you’re still not convinced of the advantages a cold email can have in getting investment, take a look at Mapistry. While CEO Allie Janoch’s first cold email didn’t quite work, the second one led to an incredible $2.5m in funding! 

One final thought from us. If you don’t receive a response, don’t be disheartened. Many investors are busy and have a lot of emails to get through. It may be that they haven’t read your email yet or that your startup just isn’t the right fit for them. Keep following upping till the answer will be received. Also, we would suggest using mail-tracker tools to get to know when the investor opened your email.

If you don’t hear back, just move on. There’ll be an investor out there who is waiting for your cold email.

Need a little extra help crafting the perfect cold email to an investor? You are launched is here to help.

We’ve been working with lean startups since 2014. 

As we have a lot of experience working with investors across the world, we can help you say exactly the right thing if you are looking to get funding for your new business.

Contact us today and see how we can help your startup grow.