Investor Selection & Research

Not all angel investors and venture capitalists are interested in the same type of business. At this stage, your goal is to research and identify the most suitable investors for your startup. Platforms like AngelList, Crunchbase, and Gust are excellent tools for discovering and analyzing potential investors.
Additionally, LinkedIn is a powerful resource for finding and connecting with investors. When identifying potential investors, focus on those who:
✔ Have expertise in your industry or problem domain.
✔ Have previously invested in startups of a similar size and stage.
✔ Are located in or familiar with your target market.
✔ Are passionate about the problem you are solving.

How to Better Approach Investors

An average investor receives around 500 pitches per year, while top-tier firms like Sequoia Capital receive over 10,000.
In this competitive landscape, cold pitching rarely works—your email is likely to get lost among hundreds of others. The best way to stand out is to secure a warm introduction from someone the investor knows and trusts. This is where LinkedIn becomes invaluable—you can quickly identify mutual connections who can introduce you. Additionally, investors often research founders on LinkedIn, so ensure your profile is fully updated with relevant company and personal details.

How to Request an Introduction the Right Way
🔹 Do your research before asking for an intro. If it's a close friend, a simple request works. But for colleagues, industry contacts, or senior executives, be prepared with key details about your startup and a short, compelling elevator pitch.
🔹 Use multiple outreach channels. While LinkedIn is great, don’t rely on it alone. You should also send direct emails or explore other platforms investors engage with.
🔹 Finding investor emails. If you know the investor’s name but not their email address, tools like Folk.app can help (refer to the ‘Cases’ tab for more details).
Persistence and multi-channel outreach are key—keep refining your approach, and you’ll increase your chances of making a meaningful connection. 🚀

Introducing Yourself to the investor

Hi Ted,
I hope you are having a fantastic day! My name is Nate, and I’m a co-founder at XS. I am reaching out because you backed Miso Media [explain connection with an investor, whether it is a network, or you visited the same event], which I love, and I wanted to get your advice about our new company since we have just opened our seed round [explain the reason and occasion]. To thank you for your time, if you’re interested in surfing and you find yourself back in the San Francisco Bay Area, I’d love to give you a lesson, or more traditionally, buy you a cup of coffee [promise an award for his time and attention, you should do reasearch].

I know your time is really valuable so in the spirit of the 30 second pitch here is an overview of XS.
XS is creating a mobile community for action sports enthusiasts. Our app is a place where people can view and share high quality user generated & professional photos/videos. As we grow, we’ll leverage user behavior and information to sell discounted sporting goods. Think Instagram/Pinterest meets Fab for sports. [1 paragraph pitch]

1: Pitch deck: https://www [attached, or link for a pitch deck]
2: 3 min pitch video: https://www.youtube.com/watch?v= [link to your video pitch if any]

Thanks for your time and I look forward to meeting you in the near future!
Best,
Nate Mihalovich Co-founder

!! If you ask your friend to make an intro, you should write for him/her a similar intro email.

Initiating a Conversation

Once you've established a connection with an investor through a mutual contact, the next step is to secure a warm introduction and get into their email inbox. This is where your email deck plays a crucial role.
An email deck is a concise version of your full pitch deck, typically no more than 10 slides, focusing only on the most critical aspects of your business. It should be clear, visually compelling, and straight to the point, with less text than a standard pitch deck.

Key Goals of Your Email Deck:
✅ Capture the investor’s attention quickly
✅ Present the core opportunity in a digestible format
✅ Encourage a next step—a meeting or call to discuss further

For maximum impact, consider including a short video pitch along with your email deck. A compelling 60-90 second video can help bring your vision, passion, and product to life, increasing the likelihood of securing a follow-up conversation. 🚀

Investor’s Meeting and Pitching

The first meeting with an investor is crucial, and the impression a founder makes is formed within the first few minutes. Instead of thinking about having 20, 30, or 40 minutes, focus on making the most of the first 5 minutes. Use this time to introduce your team, showcase your passion, and capture the investor’s attention. Energy, confidence, and clarity in these first moments can determine the outcome of the entire meeting.

Minute 1: The Hook – Why This Matters Now

• Start with a compelling one-liner about your startup.
• Clearly define the problem you are solving and why it’s urgent.
• Example: “Every year, companies lose $50B due to inefficient hiring processes. We built an AI-powered hiring assistant that reduces time-to-hire by 70%.”

Minute 2: The Team – Why You?

• Investors invest in people first, so introduce your founding team in a way that highlights your unique edge.
• Example: “I’m Alex, a former hiring manager at Google, and my co-founder Sam built AI systems at Microsoft. Together, we know the pain of slow hiring and how to fix it.”

Minute 3: The Traction – Show Momentum

• Share key growth numbers that prove your idea is working (users, revenue, partnerships).
• Example: “We launched 6 months ago, have 15 paying clients, and are seeing 40% MoM growth.”

Minute 4: The Market & Opportunity

• Investors want big markets. Show why now is the right time to build this.
• Example: “The global HR tech market is worth $35B and growing. Companies are actively searching for automation solutions.”

Minute 5: The Ask – What’s Next?

• Clearly state what you’re raising, why, and how you’ll use the funds.
• Example: “We’re raising $2M to scale sales and improve automation. We have commitments for 30% of the round.”

By the end of 5 minutes, the investor should:
✅ Understand what you do and why it’s important
✅ See your credibility and why you are the right team
✅ Recognize your traction and market opportunity
✅ Know how they can get involved

Understanding Different Types of Investors

Different investors have distinct preferences when evaluating potential startups. Tailoring your materials to match their expectations increases your chances of securing funding.

✅ Family Offices – Prefer detailed Investment Memorandums (IMs) and financial models that adhere to accounting standards (e.g., forecast balance sheets, income statements). They also value printable summaries for easy distribution during meetings.
✅ Venture Capital Firms – Look for short, concise pitch decks that quickly communicate your business potential. If interested, they will likely request access to an online Data Room for deeper due diligence.
✅ Accelerators – Require bespoke written applications with targeted questions before inviting startups to pitch in person. Since these applications can be time-consuming, it’s best to record and structure your answers for reuse in future applications.

🔹 Tip: Understanding what each investor type values allows you to present the right information in the right format, increasing your chances of success. 🚀

Pitching

A pitch is a short presentation that typically lasts up to 3 minutes, often accompanied by slides. To be fully prepared, you should have:
✅ A 90-second pitch
✅ A 3-minute pitch
✅ A video pitch

Here are some essential tips for delivering an effective pitch:
1️⃣ Be ready anytime, anywhere. A strong pitch = (presentation skills × content × storytelling) × right time & place.
2️⃣ Keep it simple. Avoid jargon and complex explanations—use clear, concise sentences.
3️⃣ Use relatable examples. Draw comparisons, share real-life use cases, and make your idea easy to grasp.
4️⃣ Tell a compelling story. A great pitch isn’t just facts—it’s a narrative that connects emotionally.
5️⃣ Pitch solo. While the founder typically presents, every team member should be able to pitch if needed.
6️⃣ End with a logical conclusion. Summarize your key points and reinforce your value proposition.
7️⃣ Don’t overload with details. Focus on the big picture rather than drowning the audience in numbers.
8️⃣ Show passion. Investors and stakeholders need to see that you truly care about your idea.

Pitch Deck Structure

Here’s an interesting and valuable pitch deck template from Headline.com that could serve as a strong starting point for your presentation. While there is no universal "golden template" for all pitches, this structure provides a solid foundation.

🔹 Use this template as a guide, but customize it to fit your story. You may not need all the suggested slides—focus on what best conveys your startup’s vision, traction, and potential.

DataRoom

Having a well-prepared DataRoom ready immediately after the first investor call is critical for building credibility, saving time, and accelerating the fundraising process. It demonstrates that you are organized, transparent, and investment-ready.

Essential Components of an Investor DataRoom
1. Company Information
✅ Incorporation Documents – Articles of Incorporation, bylaws, business registration, and shareholder agreements.
✅ Pitch Deck – A well-structured, investor-focused presentation covering your business model, product, market opportunity, competitive advantage, and financials.

2. Team Information
✅ Team Overview – Key team members, their roles, and relevant experience.
✅ Organizational Structure – A simple org chart showing responsibilities.
✅ Advisors & Key Hires – List of strategic advisors and critical hires planned with funding.

3. Financial Documents
✅ Current & Projected Financials – P&L statement, balance sheet, cash flow projections, and revenue forecasts.
✅ Unit Economics – Core metrics such as LTV to CAC ratio, gross margin, ARPU (Average Revenue Per User), and customer retention.
✅ Burn Rate & Runway – Breakdown of monthly expenses and runway at current & post-funding burn rates.

4. Market Opportunity
✅ Market Research – TAM/SAM/SOM analysis with market trends, growth potential, and industry benchmarks.
✅ Competitive Landscape – Direct and indirect competitors, market positioning, and differentiation strategy.

5. Legal Documents
✅ Intellectual Property (IP) – Patents, trademarks, copyrights, and any licensing agreements.
✅ Contracts & Agreements – Key partnerships, supplier contracts, and customer agreements.
✅ Compliance & Regulatory Information – Any GDPR, HIPAA, or industry-specific compliance documents.

6. Fundraising Information
✅ Current Round Details – Funding goal, valuation, and allocation of funds.
✅ Previous Funding Rounds – Summary of past investments, investors, and funding history.
✅ Cap Table – Ownership breakdown among founders, investors, and employees (with ESOP details).

Investment Agreements and Due Diligence

The discussions don’t end with the initial meeting—unless it’s a demo day hosted by an accelerator or incubator, where startups present to multiple investors at once. Typically, securing investment requires multiple follow-up meetings to align on the funding amount, terms, and other critical aspects. Negotiations are a two-way process, requiring both sides to find a mutually beneficial agreement.

During due diligence, the investment team thoroughly evaluates your startup—examining financials, revenue model, competitive landscape, team strength, and even the founders’ professional backgrounds.
Once this process is successfully completed, final negotiations begin. At the pre-term sheet stage, you should have a clear understanding of key investment terms, including investment type (equity, debt, convertible note, or SAFE), valuation, and equity distribution among founders. Consulting an experienced investment attorney at this stage is crucial to ensure you fully understand the legal implications and protect your interests.

The Term Sheet

A term sheet is a non-binding agreement that outlines the investment structure and key conditions of a deal. It typically includes three main categories of terms:

1️⃣ Economic Terms – Cover financial aspects such as valuation, price per share, total investment amount, vesting schedules, exercise periods, and anti-dilution provisions.
2️⃣ Control Terms – Define governance and decision-making rights, including board seats, voting rights, protective provisions, and drag-along agreements.
3️⃣ Other Terms – Address additional clauses such as dividends, redemption rights, liquidation preferences, and other shareholder rights.

Although a term sheet is not legally binding, it serves as the foundation for further due diligence. Once all terms are finalized, a legally binding shareholders' agreement is drafted to formalize the investment.

Secrets of Sand Hill Road by Scott Kupor is an excellent resource for founders, especially in understanding the venture capital landscape and the legal intricacies of fundraising. The book breaks down complex terms and processes clearly, making it easier for founders to navigate the world of venture capital and legal agreements.

Post-Term Sheet Diligence

The Post-Term Sheet Due Diligence is one of the most critical steps in the startup fundraising process. While the term sheet marks the beginning of the investment process, it is not a final agreement—it initiates an in-depth review of your business. This phase is crucial because it involves legal, financial, and operational assessments, ensuring compliance with all contractual obligations.

At this stage, the investor’s legal team steps in to verify that the startup meets the terms outlined in the term sheet.

The due diligence process typically covers:
✅ Financial & Bank Statements – Investors analyze financial health, revenue consistency, and market valuation.
✅ Background Checks – Founders’ past experience, reputation, and any potential red flags are examined.
✅ IP Due Diligence – Ensures the company’s intellectual property (patents, trademarks, copyrights) is legally protected.
✅ Legal Review – Assessment of employment contracts, business formation documents, liabilities, and other legal commitments.

The duration of this process depends on the complexity of the business and the completeness of the provided documentation. It can take anywhere from a few days to several months, so startups should be well-prepared and proactive in providing requested information.

Round Completion And Fund Transfer

Once due diligence is successfully completed, the final step is to formalize the investment agreement and receive the funds. This stage involves signing the legally binding documents that outline the investment terms, including the funding amount, equity distribution, or repayment terms (if applicable).

For equity investments, this means executing shareholder agreements and updating cap tables. For convertible notes or SAFEs, the agreement will specify repayment conditions, interest (if any), and conversion terms.
Once the contracts are signed, the investor transfers the funds, officially marking the beginning of your growth journey. At this point, your startup has secured the capital needed to execute its vision and scale effectively—but remember, investor relations and financial accountability remain key to long-term success.

⏳ 20 min to read

Folk.app: A Powerful Tool for Managing Your Investor Database

Folk.app is a CRM (Customer Relationship Management) platform designed specifically for network-driven teams, including founders, startups, and investment seekers. It enables you to efficiently manage and track relationships with investors, advisors, and key stakeholders.

📌 Please use this link to try Folk.app https://try.folk.app/a7g7ra6mdhi4

Why Use Folk.app for Investor Management?

Centralized Investor Database

• Store investor contacts in one place, with LinkedIn profiles, emails, investment preferences, and interaction history.
• Organize investors by fund size, industry focus, investment stage, and location.

Automated Tracking & Follow-Ups

• Keep track of where each investor is in your fundraising pipeline (e.g., contacted, meeting scheduled, pitch sent, negotiating, committed).
• Set reminders to follow up at the right time.
• Automate personalized follow-ups based on previous interactions.

Collaboration with Team Members

• Share investor lists with co-founders, advisors, or fundraising teams.
• Assign tasks and set priorities for outreach.

Seamless Integrations

• Folk.app connects with LinkedIn, Gmail, Google Calendar, Slack, and Zapier, making it easier to sync investor interactions.
• Pull in email conversations and meeting notes automatically.

Dynamic Lists & Smart Filters

• Group investors by fund type, response status, last interaction, or investment interest.
• Use tags and labels to keep your outreach organized.

Investor Pipeline Visualization

• View your fundraising progress in a Kanban board or table format.
• Quickly identify which investors need follow-ups and which are moving forward.

How to Use Folk.app for Your Investor Database

Import Your Investor List

• Add investors manually or import a CSV file with key details.
• Sync contacts from LinkedIn or Google Contacts.

Categorize & Prioritize

• Use custom tags like early-stage VC, angel investor, fintech-focused, etc.
• Rank investors based on their relevance and responsiveness.

Track Interactions & Set Reminders

• Log emails, calls, and meetings.
• Schedule follow-ups so no opportunity slips through.

Monitor Progress with a Pipeline View

• Move investors through different fundraising stages (e.g., Intro Call → Due Diligence → Negotiation → Committed).

How to Find Investors’ Emails Using Folk.app & LinkedIn Integration

Folk.app makes it easier to find and manage investor emails by integrating with LinkedIn and using the "Enrich" button to automatically gather missing contact details. Here’s a step-by-step guide on how to do it:

Step 1: Connect Folk.app with LinkedIn

1. Sign in to Folk.app and go to your workspace.
2. Navigate to Integrations in the settings menu.
3. Connect LinkedIn to allow Folk to pull investor contacts from your network.

Step 2: Import Investors from LinkedIn

1. Open LinkedIn and search for investors using filters like:

• Investor type (VCs, angel investors, family offices, etc.)
• Investment focus (fintech, AI, SaaS, etc.)
• Fund stage (pre-seed, seed, Series A, etc.)
• Location (Europe, US, etc.)

Once you find a relevant investor profile, use Folk’s Chrome extension to save the contact directly into Folk.app.

Step 3: Use the "Enrich" Button to Find Emails

1. After adding an investor to your Folk database, go to their profile in Folk.app.
2. Click on the "Enrich" button to automatically gather missing details like:

• Email address
• Company name & website
• Social media profiles
• Job title & professional history

If the email is available in public databases, Folk will automatically retrieve it.

Step 4: Verify & Organize Contact Information

1. Once Folk.app finds the investor’s email, validate it before sending outreach emails.
2. Tag and categorize investors by:

• Investment stage (pre-seed, seed, etc.)
• Industry focus
• Level of interest (cold, warm, engaged)

Set follow-up reminders for email outreach.

Step 5: Sync with Gmail & Automate Outreach

1. Sync Folk.app with Gmail to send personalized emails.
2. Track email opens, clicks, and responses to measure investor engagement.
3. Use folk’s email templates to craft investor outreach messages efficiently.