How do you raise capital for the first time? It often starts with an email.
That’s according to investors eyeing the region who spoke with Triangle Inno following an investment panel meant to help startups connect to capital. The panel discussion on Friday was sponsored by CIT GAP Funds, a family of seed and early stage investment funds investing in Virginia companies.
William Leonard, investor at Atlanta-based Valor Ventures, and Chris Eng, principal at Washington, D.C.-based Sands Capital, both told Inno on Monday that the Triangle is a region of interest for their firms.
And both accept cold pitches.
Leonard said Valor accepts cold pitches through email, its website and LinkedIn.
Leonard said the pitch email needs to have multiple components – from a description of the state of your business (including traction, revenue, customers) and how the founding team “is bringing a unique, differentiated perspective to the startup you’re building.”
Leonard said pitches should also include an ask.
“I get pitches that don’t really have an actionable component to it, so an ask is always good to include,” Leonard said.
Eng said the pitches that stand out are the ones where “there’s a real alignment between what we’re looking to invest in and what the entrepreneur’s company is building.”
Research matters. He advises only targeting your cold email pitches to funds where what you’re building specifically fits into the categories it lists as interest areas on its website.
Leonard and Eng both participated in a panel on Friday alongside other investors, including Ansley Carlisle, an associate at Mark Cuban Companies in Dallas, offering even more perspective.
Capital raising 101
At the event, the venture capitalists broke it down further – both their own value propositions and how entrepreneurs can stand out.
“We tend to really focus on differentiated tech,” Carlisle said, noting AI is a big area of interest. Key for Mark Cuban Companies are differentiation and disruption. “If you are creating your own space in the marketplace or joining an existing market place, are you going to have the technology to really take over?”
Investors cautioned entrepreneurs not to just take any capital. Take capital from firms that can help you outside of dollars, they advised. At Sands, Eng said the firm tries to “connect you to the C-level executives we think can really help.”
And make sure to flaunt your expertise.
“We really like to see founders who have unparalleled insight in the industry they’re in,” Leonard said, adding that he looks for “founders who have the ability to sell.”
Product-market fit is also essential.
If you have the greatest product in the world, “but no one there to buy it,” it’s unlikely to score a check, Eng said.
And don’t worry about having the perfect go-to-market plan solidified when you pitch to seed investors.
“If what you have is going to change over time, I think that’s okay,” Carlisle said.