Founders seeking venture capital funds for their new startups may find the entire process daunting and challenging, yet getting the right venture capitalists (VCs) to support their startups can make or break their fledgling business. Both corporate venture capital firms and traditional venture capital companies have been on an investing spree in Asia lately, wheeling and dealing their way across the continent and allocating their massive war chests to startups that show tantalizing promise. For new startups that are just getting their feet wet in the market, approaching the larger and more established venture capital firms may seem an unattainable prospect, let alone getting their interest to invest. However, here are three uncommon approaches that may help your startup gain an edge in getting investors’ attention and sealing the funding deal.
Established names and brands in the VC world are not hard to miss; you can find news about their latest endeavors and initiatives on social media almost on a daily basis. It is the lesser known VCs and smaller funds that are harder to come by. Indeed, since some of these venture funds may not be operating in an official capacity as of yet, their information and data are not publicly available. And yet, they are actively seeking out promising startups and projects to invest in, just like any other VC. As a founder, it is important to keep close tabs on new funds and their network of partners and associates since they can lead your startup to new sources of funding that may otherwise be easily overlooked.
Some founders seek to contact any and every VC that they can find, hoping that the law of numbers will eventually work in their favor by awarding an interested party out of the many hundreds of cold calls and emails that they have sent. This approach is very labor-intensive and costly, and there is a risk that by going after short term gains, you may actually end up hurting your startup’s long term prospects. Instead, aim to establish genuine relationships by seeking out VCs that operate or invest in your startup’s industry or area of expertise. Actually, you can take this concept even further by seeking out shared personal interests, such as learning from their social media accounts whether they have the same passion for a sport as you do. You can then leverage on this information and use it as an ice breaker to build a personal bond, which can eventually progress to become a business relationship.
One of the oldest means that humans throughout the ages have used to establish a channel of communication with each other is through gift giving. By giving away something of value without expecting anything in return, this approach demonstrates the sincerity and earnestness of the giver. Utilizing this approach is a great way of establishing an initial rapport with the VCs that you want to get the attention of, and you can then leverage on this connection later to request what you need from the VCs. In fact, you can use this approach to introduce your startup’s services or products to the VC by offering them free subscriptions, premium services, samples or trial periods in order to gauge their level of interest and get important feedback.Some founders have sent cold emails to VCs directly that include a free premium subscription to their platforms, to which the VCs have responded very positively. A well-prepared soft pitch accompanied by an attractive offer is usually a great way to open doors and establish new relationships.
Seeking out VCs and getting their support for your startup is not easy, but it can be achieved with the right knowledge and determination. By utilizing these three uncommon yet proven approaches of getting a VC’s attention, you startup is that much closer to getting the funding that it needs to thrive.