How to Apply Sales Techniques to Fundraise Ruthlessly and Efficiently

Raising capital is a tough, painful experience and I see many startup founders get very frustrated or even give up after a few short weeks of the grind. A lot of the frustration stems from how surprisingly messy fundraising is. One way to overcome the messiness is to fundraise efficiently by regarding it as a sales process.

Think about it —  what’s the closest proxy to fundraising? Enterprise sales. In both, you have a relatively complex product (aka your startup and all its nuances), a limited number of “buyers,” longish sales cycles, multiple decision makers, and multiple steps toward a decision.   

Fortunately, sales is a well-trodden path. Here’s how to apply proven sales techniques to streamline your next round and and make it 10x easier and more efficient:

Step 1: Build a broad list of investor leads

What’s the first step in any sales process? Building a funnel full of leads. Since raising capital is a “numbers game,” you need a meaningful number of investors at the top of your funnel to end up with a handful of checks dropping out of the bottom.

For our seed round, I reached out to around 200 investors and pitched around 100 to get a lead VC and 10 angels. Jeff Bezos famously pitched over 60 investors to raise the first $1 million for Amazon. This dynamic holds true for later rounds as well.

So where do you find these leads? Numerous places:

AngelList has assembled a solid database of investors, with an emphasis on angels and their “syndicates.” At recent count, there are about 29,000 investors on the platform. Searching is straightforward and fast.  

The “Find Investors” feature on Foundersuite connects to a database of roughly 50,000 investors, including angels, VCs, and some PE folks, and has the added advantage of a fast UI and the ability to instantly populate matching leads into the CRM. Searches are currently done by selecting industry and location tags.

Crunchbase is useful for cross-referencing deals and for looking at who funded similar (but not competitive) deals. In short, when you stumble across a company in your space, simply plug them into Crunchbase's search field and scan down to see who invested at the stage you are currently raising. Crunchbase also has an API and a mobile app.

LinkedIn is extraordinarily useful as a resource for finding intros (more on that later) but can be somewhat overwhelming and “noisy” on the investor sourcing side. The best way to use it as a lead-generator is to pick a person in your network, find their Connections, search for “Investor”, and see who they know. I call this “scraping your network.” It’s time-consuming but every lead will presumably be a warm intro with this method.

Mattermark, CB Insights and PitchBook have built large datasets with advanced search and filtering features. They also have solid daily newsletters —  PitchBook contains deal roundups and a daily “Startup Profile” covering a given company's funding history, investors, management and more. Mattermark’s newsletter is a roundup of articles written by VCs and startup operators. These are all paid services (but the newsletters are free).

Other places to find investor leads include:

+PEHub, TermSheet, Inside and other newsletters: These are free and report funding rounds as they happen in a daily email format. They are useful for seeing who’s active and what’s getting funded at the moment.

+Conferences: Scanning the speaker list of relevant industry events is a great way to pick up a few leads. Investors like to get out in front of a new industry (AI, drones, etc.) and build a “brand” for themselves by making the rounds at conferences. If they’re new to a space, they’re also likely to be hungry for new deal flow.

+Quora: A few quick searches on terms such as “top SaaS VCs” will generate a decent list of names to add to your funnel.  

How many names should you add to your funnel? As many as you can. As Elizabeth Yin of 500 Startups writes, you need to meet with 100 investors to close a round — that’s 100 meetings. Thus, for this first step of the funnel, aiming for 200+ initial names is a good goal, especially because we’ll cull the list next.

Step 2: Set up a tracking system

As you work on your list — and later, as you start pitching — the complexity of keeping track of all the names, conversations, follow-ups and to-do items will grow exponentially. Every investor meeting might spur 3-4 follow-up items to work on. Multiply that times dozens of investors… well, you get the point.

In short, you need a system to manage your fundraising — or else, you will go insane.

If you’re running a low-key fundraise, you might be able to get by using an Excel spreadsheet or Google Sheet. Give your columns labels such as: Investor Name / Contact Info / Last Contact / Current Status / Last Contact / Referred By / etc.

The downside of using a spreadsheet is that it quickly becomes cumbersome, bloated and “messy” and things start to slip through the cracks. (Ask anyone who’s used a spreadsheet to do a raise, and they will tell you how much they hated it by the end.)

The other — and better— approach is to use a CRM system to manage your pipeline.

There are several good products on the market. Full disclosure - I am the CEO of Foundersuite, and we make an Investor CRM that is designed specifically for startups that are raising capital. It features integrated database and investor or update tools. Other notable tools for managing a fundraise include Trello, Pipedrive, and Salesforce, though the latter tends to be too complex.

Regardless of how you skin it, get a system in place to manage your investor funnel and the hundreds of conversations you’ll soon be having.

Step 3: Filter and qualify your list of leads  

Now that we’ve got our broad list built in a tracking system, it’s time to take the next step and “qualify” these leads. Keeping with the enterprise sales metaphor, not all leads are created equal, and in fact, many are not real leads at all.

This holds doubly true with fundraising. I can tell you there’s nothing more frustrating than driving from SF to Menlo Park — 1.5. hours each way given current Bay Area traffic — only to discover that the “early stage investor” you’re meeting with is looking for $200k MRR — or worse, they’re not currently doing new deals.   

You’ve just wasted half a day, which in startup time is equal to a week.

Thus, it will save you a huge amount of headache and angst if you diligently prune your initial list. We call this “qualifying” your leads. Reasons to remove an investor from your target list include:

Reason to Delete:

How to figure this out:

They invested in a competitor

Cross-reference on Crunchbase, AngelList, or their website “portfolio” section (if a VC).

No dry powder (funds)

For VCs, search PEHub, VentureBeat, and general Google searches (“Accel raises fund”) to see when they last raised. For angels, scan their LinkedIn — have they done a new deal in the last 6 months? 

Wrong sector focus

If a VC, scan their website (most are quite clear what industries they focus on). For angels, study their LinkedIn, blog, and Twitter profiles.

Wrong stage

This one is a little tricky, and you need to read between the lines. When VCs say they provide “growth capital” it actually means they are later-stage investors. If you’re seed-stage, explicitly look for language that suggest they invest at the earliest stages. 

Wrong geographical location

Scan their websites of VCs and Linkedin profiles of angels. Many will specifically say they focus on startups in a certain region. If you’re not in that region, skip. 

Has bad reputation

This one is also tricky. Sites like provide some unvarnished color, but your best bet is to ask around…especially if you’re in an accelerator or alumni group. 

As a general rule of thumb, you should remove around 25-30% of your original target list because of one of the reasons above. If you diligently cull your list now, your hit rate will be much higher later.  

Step 4: Map your connection / intro path

In this next stage, you’re going to get very intimate with LinkedIn. The gist of this work is to find connectors who can make a “warm” introduction to as many people on our filtered list as possible.

Why is the warm intro so critical? Because the odds of raising money go up exponentially if you get the meeting, and the odds of getting the meeting go up exponentially if your pitch materials reach the VCs desk through a trusted and friendly source.

The process is simple. For each qualified investor left over from step 3, open up their LinkedIn page. Scroll down about halfway on the right hand side and you’ll see the “How You’re Connected” diagram.

Find your “strongest” connection and add it to your “Connector” field if using Foundersuite, or to the appropriate column if using a spreadsheet or other CRM.

By the way, “strongest” is a function of: (i) how well you know the person; and (ii) how much clout or influence that person has with your target investor. There’s a hierarchy of who you should ask; at the top of the hierarchy are startup founders that have made VC money, followed by founders they’ve funded and VCs they’ve done deals with. Lower down the totem pole (but still relevant for intro purposes) are attorneys, professors, and various other connectors.

Go through this process for each lead on your list. For any investor with whom you do NOT have a first or second-degree connection, your best options are to: (a) reach out and network with startup CEOs that have been funded by that investor (for example, ask them about their experience working with said VC, and if you develop a rapport, then ask for an intro); or (b) send a highly-personalized cold email with a brief description of your business, traction, and ask if you can send along a deck.

Step 5: Polish your pitch materials

I’m not going to cover this in detail here, but it is assumed that you have a pitch deck, executive summary, elevator pitch, and often a financial model tight and ready to go. The pitch deck is the most important as it is your “workhorse” during the deal; you will use it constantly. (If you need help or a few pointers, refer to our free 12-page PDF called “The Ultimate Pitch Deck Guide.”)

I strongly suggest you host a copy of your pitch deck online. This allows you to send a link in the intro emails, and depending on what system you use, you can track who has viewed your deck. It also allows you to update and revise the deck as you go, something that’s not possible if you attach a PDF. Foundersuite’s Investor Updater tool is commonly used to host investor decks; other options are services such as Docsend or Dropbox.

Step 6: Start dropping intro bombs

Let’s take a moment to review your work thus far: you’ve built a list of 200 names, qualified and filtered that list down to 100-150 well-scrubbed targets, mapped a connector to as many of these as you can, and well-honed your pitch materials.

It’s time to start having conversations. Many, many conversations. It’s time to start reaching out, talking to the money folks, and generating momentum for your deal.

The best way to start is to email your connectors asking or confirming that they will make introductions. Unless it’s your best friend, you should never just assume a colleague will be willing to make an intro, since introductions cost the person a form of currency known as “social capital.” Send them an email like this:


… and “Jeff” will typically reply with a short list of folks he knows well enough to connect you to.

Next, for each and every VC that Jeff has approved, send Jeff a new, clean email (i.e. don’t hit “reply” but start a new thread”) — something that looks like this:

Now all Jeff has to do is click Forward and ask Jason if he wants to be connected. You’re making it easy for Jeff. He doesn’t need to write a lengthy overture, he doesn’t need to clean up a thread, he doesn’t need to do anything other than click “forward”. “Making it easy” in this manner is extremely important; the more valuable a connector is, the more busy he or she is, thus, the easier you make the process, the more likely it will get done.

Step 7: Hustle and jive (and qualify some more)

By now your fundraise is in full swing. While you might initially test your pitch on a small sample size — for example, on a couple of investors lower down on your list — your main goal during this phase is to line up as many meetings as humanly possible.

Again, it’s about generating momentum, and the best way to generate momentum is to have a lot of meetings. Every day. Every week. Until you’re funded. :)

Investors can “smell” when you’ve got some heat on your deal, and it also gives you an air of confidence when you have a lot of meetings lined up. Conversely, if your fundraise is dragging out and not really catching fire — investors can smell this as well.  

The format of the meetings will vary — coffee versus in-office versus online — but most tend to be scheduled for 30 minutes to an hour. At the initial hello, be sure to refer to the connector and how you know him if the bond is strong. After a minute or two of small talk, it’s time to get into it. I like to ask the investor what format she prefers, e.g. “how do you like to do these? Do you want to go through the deck, or do a product demo, or just chat a bit?”

If you’re doing a call, be sure to have a screen sharing system setup and ready — you don’t want to chew up 10 minutes downloading and updating your Webex software (this happens all the time).  

Try and guide the discussion as best you can, and be sure to conclude with next steps. Also conclude with questions for the investor — remember Step 3, where we qualified the list? Well, even though you’re pitching, you should still be qualifying the folks you’re talking to — right up to (and beyond) a term sheet. In this first meeting, I start with some softballs that try to elicit interest — “have you guys done deals in this market recently and are you actively looking at this space?” In later meetings, we get into more “mutual due diligence” types of questions.

After all, it’s far better to take “dumb money” or no money at all than to take money from a VC who is going to make your life miserable for the next 7 years by giving you bad advice or imposing onerous controls or restrictions.

Step 8: Herd the cats across the finish line

After about 10-15 meetings, you should be a pretty good feel for whether your round is going to be a drawn-out slog or whether it will close pretty quickly. Most tend to be the former; that’s normal.

Hopefully you’re starting to get some good interest, and meetings are leading to progressively deeper-dives on the part of the investors. This means they’re interested, and if they’re interested, the discussion should veer toward valuation and terms, and one or more of them should start putting down term sheets. Or, if you’re raising a convertible note, you’ll start to get some firm commitments.  

But even if you don’t have a term sheet after the 15th pitch meeting or so, don’t despair. Again, fundraising is a numbers game, and from my experience if you’re averaging a 5-10% “hit rate” of pitches to commits, that’s pretty good. Thus, to get 1 seed fund and 5 angels to come in on your round, it’s very likely you’ll need to pitch 100 people.

Weak founders give up too early. Smart founders know when to persevere, and when to quit (i.e. err on the side of persevere). Stay hungry and stay determined until you’ve talked to at least 50 investors, and if you’re still not getting much interest, it may be time to regroup and try later.

Otherwise, follow up frequently with everyone who’s still in your pipeline, and keep your foot on the gas until the money is in the bank. When you get one term sheet, use it as a catalyst and push the other funds to either put one down or recuse themselves from the process. When you get a verbal “yes”, employ Paul Graham’s handshake deal protocol. The more commitments and/or terms sheets you have, the more leverage you have and the faster you can move the round to close.


Go for the close — raise the celebratory glass with your team and all the connectors who helped along the way — and then get back to work. Your next round is likely only 12-18 months away, and you get to do it all over again! :)

Do you have any advice for startup founders raising capital?