We got connected with our first investor through one of my co-founders. He was her boss at an old job, and thoroughly believed in anything she was a part of. When he heard she was starting something, he cut a fairly large check.
- Sameer Soleja, Founder and CEO, Molecule Software
I was in a business selling high end boats to wealthy individuals. I built great relationships with dozens of CEOs and wealthy families. When it came time for me to raise money for my next venture I called on many of them to be angel investors. It worked.
- Shaun Sorensen, CEO & Co-Founder, Kenect
How did we get connected with our first investor? It was a long process. Coming from Finland, I booked an AirBnB apartment in San Francisco, stayed there for the summer of 2019, and just started approaching investors with cold outreach.
I didn't get too many responses to my cold emails, but I got lucky at a startup event where I got picked to go up on a stage and chat two minutes with a famous VC partner. After that I got a meeting with their firm. I knew that going into a tier 1 firm for my first proper pitch would be unlikely to result in an investment, but I wanted to use the opportunity to build a network.
VCs need founders just as much as founders need VCs. They also need dealflow, so as long as you're not going to be an embarrassment for them, asking for warm intros during your meetings will be a great way to expand your network.
So I did just that, and started bootstrapping a network through dozens of meetings and intros. I met with 50 VC firms during that summer and ended up raising $5.6 million.
The first person to commit $1 million was a VC partner that I met in a cafe in San Francisco. I had met a person in his team an hour earlier and they set us up for the chat. It was a handshake deal, and it really helped us move the series seed fundraise forward. Our lead investor came through a cold email (they reached out to us) after hearing about us through another investor who had passed on the company earlier.
Networks matter and you can't short-circuit the process.
- Antti Karjalainen, CEO, Robocorp
I shared an uberpool with an entrepreneur who introduced me to our first investor.
- Wardah Inam, CEO, Overjet
Best answer: build a business where you're overwhelmed with new customer demand, growing 10% MoM or more, and are on a clear path to cash flow positive but see an opportunity to raise a venture investment that will enable your business to grow 3-10X faster in the next 12-18 months. Then go email an investor and let them know you've got that kind of business. And make sure you email an investor who has invested in your space or publicly states they like your space!
- Michael Rosengarten, CEO, Camino
The right solution, the right team
I have had many investors over the years for various companies and all of them knew me on a personal level before investing. They either witnessed my track record firsthand or they saw my work ethic or experienced my unique ability. When it came down to inviting investors to get involved, I did just that…
“John Doe, I am doing a round for XYZ company and I don’t want you to feel any pressure to invest if this is not the right opportunity for you, but I would feel badly not at least sharing what I am doing because I would MUCH rather have you involved than a random person.”
Raising capital is easy when you have the right solution and the right team, so asking for money should be an invitation that you hand out in an extremely exclusive way so that only the RIGHT people have the opportunity to say yes.
Speaker in class
My first outside investor was a speaker in our entrepreneurship class.
- David Karandish, Founder & CEO, Capacity
I believe a lot of entrepreneurs get hung up on this piece of the journey... Maybe a more important question would be "How did you get your first client?" or "How did you earn your first $$?"
However, to answer the question I will answer how we got connected with our first two investors ...
We got connected to our first investor through our University. We just so happened to win our Business school's business plan competition the first year a Fund opened. You can read more about that here.
We got connected with our second investor through networking at our University. We were recruiting student ambassadors to help promote the platform on campus. One of the candidates that showed up, came to us with a different agenda. Little did I know at the time that his father had built and sold a SaaS business in the early 2000s. After a few months of working together and him looking at this opportunity through the lens of an investor, he spilled the beans and introduced me to his father as a potential investment.Long story short, his father has been our leading angel investor (as well as my mentor) and that student went on to be a part of our founding group and today is our Head of Sales.
In conclusion - work hard and try things! You never know what you'll find on the other side.
When I worked for the business plan competition at our University, I thought I was getting a prize of $7,500 - I walked away with $200,000 in seed capital (back to back years of funding). Oh and I met my technical co-founder by trying to get a prototype built in time for the competition.
When I tried to put together a group of brand ambassadors in an effort to focus user growth, I walked away meeting a business partner, a mentor and 4 years later receiving over $1M in seed phase funding.
Try to grow your business and you will meet amazing people along the way. People want to help people that are helping themselves, not those that are scheming a plan to raise money.
Standing in line at an event
There is a difference between our first investor and our first "Investor." Technically, our first investor was a local angel who wrote a $25k check, but didn't have a lot of experience with our industry or technology. He bet on me. That investment led to a couple other small investments of $25k and $50k. We later won a couple of grants. That put wind in our sails, and I literally traveled the world seeking the perfect VC but none worked out. Without expectations, I 'bumped into' who would be our lead Seed VC catalyst while simply standing in line at an MIT Enterprise Forum event. I didn't know who he was and we were joking around. We hit it off as regular people, and as he learned more about what we do, he became more interested. He decided to invest when he saw users using our technology in real life. It was a hair tingling moment. Our first round was $750k and it was oversubscribed to $1.2m.
- Andreas Forsland, Founder & CEO, Cognixion
Our first investor was a colleague in the first accelerator program we've attended; she followed our work and progress during the 12 weeks of the accelerator program and decided to invest with a convertible note. Then, we went to others in our network and a combined group of family and friends plus a few SV entrepreneurs and investors who knew us from the past decided to collectively invest in our pre-seed round.
- Nassim Abdi, CEO and Co-Founder, StoryBolt
Friend from business school
First investor at nate was introduced to me by a friend from business school.
- Albert Saniger, CEO, nate
Won the school business plan competition
I started my first company while in college in 2K – it was really difficult back then b/c there were few resources avail and the internet was nascent.
I met my first investor by winning the school business plan competition – this was a strategy that worked. That investor was not a traditional VC type by any means but he then opened doors to other peeps and from there I met more folks…
- Raj Singh, Co-Founder and CEO, Loop Team
Network + assistance from accelerator
It's thanks to people I knew in my network (high net worth angel investors). The messaging was given to me by the Alchemist Accelerator, a phenomenal B2B accelerator that we were fortunate to be a part of back in 2017. They trained us in how to approach angel investors.
The connection itself came through me rattling my brain. I put up a spreadsheet of how many people I know who are are high net worth. And this is for angel investors. You want to figure out, depending on your stage, whether you are going for angels versus a seed round (which is a different set of investors) versus an institutional investor (typically they come in for a large seed or a Series A). You make a list of these investors, and the best way is either you know them personally, or you get a warm introduction from another entrepreneur who has made that investor proud, meaning that investor likes the entrepreneur and you get a warm introduction from that entrepreneur.
- Rama Sreenivasan, Co-Founder and CEO, Blitzz
Worked in tech beforehand
Before starting Eterneva, I worked in Tech in Austin for 4 years, so I got to know a lot of technology founders and executives who later became our first angel investors, and have been the wind at our back ever since. I always advise aspiring entrepreneurs to go and get some real-world experience first and build their networks, because you'll be building your company on that experience and those relationships later on.
- Adelle Archer, CEO & Co-Founder, Eterneva
School and a capella networks
My first investors and mentors were all from my school and a cappella networks, and family friends. They got me the first intros to VCs. I don't think it could have happened if I wasn't born, raised, and living in the Bay Area.
- Richman Neumann, Founder & CEO, Modumate
I worked with my first investor in a previous company. He was the CTO of the company. I ran a sales division. This lead to a series of new introductions.
My advice to entrepreneurs is that they should reach out to everyone they know and tell them about the company and ask for help.
- JD Ambati, Founder and CEO, Everest Labs
I had a friend who was wealthy and i asked him to help me raise money and he took my deck to his investor friends to ask their advice on a deck. I met with the first well-connected investor, pitched the company, and asked for feedback or if he knew any investors who would be interested.
His response was, "yes...me!" and wrote a $75k check on the spot.
- Zack Oates, Founder & CEO, Ovation
My first investor was my former competitor of my previous business that got acquired.
- Guy Blachman, CEO and Founder, Carson Living
I got connected to my first investor through my previous boss. He was also an entrepreneur and already knew a lot of investors. Asking for intros to your existing network (previous bosses, teachers, etc.) can be a great place to start.
- Alice Default, CEO + Co-Founder, Double
Our first investor was Shvet Jain@S28 capital. I have known Shvet for over 20 years so finding my first investor was actually easy. His uncle was one of my professors and that's how I got introduced to him.
- Soumyadeb Mitra, Founder & CEO, Rudderstack
Bonus (reminder that not everyone needs investment to get started)
We’re seeking our first investor in the next year, even after having already done our first acquisition! We keep a constant flow of investor conversations going regardless, mostly sourced through our own technology connecting us to key investors through social connections.
- Rich Blakeman, CRO and Head of Strategy, ScaleX.ai
Many thanks to these wonderful founders for contributing to the first 20 Answers!
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