How to efficiently raise money by leaning on existing relationships
Cold outbound is not an effective way to raise money.
Raising capital is all about relationships, but how do you build relationships during a pandemic when no one is meeting in person?
This was the challenge of an emerging fund manager who set a goal to raise their first fund of $65M at the height of the pandemic in early 2020.
The fund manager decided to conduct outbound campaigns that are reminiscent of how SaaS companies go-to-market.
Three key learnings:
😿 It takes more contacts at the top of the funnel to reach your goal than originally planned.
😿 No matter how creative your outbound is, some people will never take a meeting (much less invest) if there is not an existing relationships
😿 Some people will never invest if there is not an overlapping mandate.
These learnings became the impetus for MoxieGTM’s product, Kizuna, which helps fund managers, operators, and non-profits accelerate fundraising using unique data sets and AI.
Even with a basic tech stack, anyone raising money with a license to LinkedIn Sales Navigator ($80/month) can use this 8-step process to improve their outbound campaigns by leaning on existing relationships.
1. Identify 20 of your strongest relationships (families, friends, former colleagues, and existing investors). These are people you can lean on to make an introduction. We call them your “Besties”.
2. Get their permission to look through their LinkedIn connections
3. Use Sale Navigator with the appropriate filters to create a boolean search for critical filters tied to your Ideal Investor/Donor Profile
4. Review the results to ensure a match
5. Add matches to a list
6. Send the list to your Bestie to see who they know the best and ask for an intro
7. Send them a blurb to use in the double-blind intro
Hi [Bestie's First Name],
Reaching out to seek your assistance with an introduction to someone who might find interest in our story as we raise our next fund.
We're looking to connect with investors who share our vision [insert mandate]. In this light, [Prospective Investor's Name] came to mind, given their [mention any relevant experience, mutual interest, or past investments].
We believe [Prospective Investor's Name]’s expertise and interest in [specific sector/industry] perfectly align with our investment thesis, and we're eager to discuss the unique opportunities our fund presents.
Could I ask you to facilitate an introduction? I've drafted a brief message below that you could pass along. Feel free to edit it to match your style.
===
Hi [Prospective Investor's First Name],
[insert personal note]
Wanted to introduce you to [fund manager] at [investment firm], a fund that is at the cutting edge of [insert mandate]. They are currently seeking strategic partners who can contribute more than just capital - individuals with insight and vision for the potential of AI.
[Fund manager] and his team believe you have a track record of successful stewardship from Seed to Series A and beyond.
Let me know if you’re open to the introduction.
Best,
[Connector's Name]
8. Schedule calls with people who opt into an intro
Disclaimer: This process is best for identifying Venture Capitalists, Funds of Funds (FOF), and High-Net-Worth Individuals (HNWI), but it is less successful for family offices and institutional investors because those individuals are less active on LinkedIn.