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Improve your cold investor emails using psychology

Writing a cold investor email is sometimes necessary when fundraising. Here’s how to write a compelling one with tips backed by science.
investor emails

Getting a warm intro to potential investors is always a good start to fundraising. It’s much easier to get a pitch meeting when someone an investor already knows and trusts can vouch for you. While a warm intro is relatively simple to get in startup-dense areas like Silicon Valley, it’s not always possible in other parts of the country—so sometimes cold emails to investors are necessary.

Cold emails get a bad rap, but it’s good to know how to reach out when you need something. And they aren’t necessarily ineffective—it’s how FiscalNote founder Tim Hwang got funding from Mark Cuban, not to mention the many other startups out there that got their first round of funding thanks to cold emails.

But you won’t win over investors with just any email—you have to consider their motivations to write a compelling message. Craft your investor emails with these tips in mind to write the best possible cold emails to investors.

1. Keep your investor email brief

Investors are busy people, and emails are just another disruption they deal with on a daily basis. You have a small window of opportunity to get their attention. Although the amount of time spent on reading individual emails has increased over time, most people still spend only 11 seconds on each email in their inbox, according to Litmus Email Analytics. So you have to get to the most important points of your email quickly.

Neurologists at the California Institute of Technology found that the amygdala is responsible for dictating personal-space limits. This concept of physical space translates online, as well, and becomes more prevalent the more time we spend on digital activities. People want to control their personal space in person and online, and this includes limiting intrusions in their inbox.

Moral of the story? Emails with a large amount of content tend to feel overwhelming. Keep your investor emails brief by focusing on need-to-know information:

  • A quick introduction of who you are: Introduce your startup with your quickest elevator pitch. For example, “We’re a finance SaaS startup that aims to simplify how ecommerce businesses calculate and pay sales tax.”
  • An indication that you know who they are: As we’ll see below, personalizing your email can go a long way. Devote a small section to showing that you have done your research and know who you are talking to.
  • Quick facts or stats about your business: Carefully select the most compelling quick facts about your business. For example, “We’ve already generated $3 million in profit this year” or “Our company was selected by the New York Times as one of the most promising new startups of 2020.”
  • Your big ask: Make this specific. Ask to schedule a call or in-person meeting.

Use bullet points and bolded font to highlight the most critical ideas so investors can understand the email at a glance.

2. Make it personal

Yes, it’s tempting to set cold emailing on autopilot by using templates. But this is no way to build authentic investor relationships. Instead, it’s best to tailor each pitch to the individual recipient.

Investors are more likely to feel connected to a business if their email is personalized. One of the seven principles behind the psychology of selling from Dr. Robert Cialdini’s book Influence is “liking.” In essence, we’re more likely to be persuaded into buying something by people we like. And one of the quickest ways to boost that connection is through creating affinities and a shared rapport.

Take time to research who you’re emailing and what their investing trends are, along with other relevant information. If you incorporate this research into your email, you’ll show investors that you have done your homework and value their experience.

Focus on publicly available information relevant to investing or your industry—basically, the reasons you think the recipient would be a viable investor in the first place. You can start your research on sites like AngelList or Crunchbase.

Bill Wilson, cofounder and CEO at SalesRight, suggests founders research the following information:

  1. Which companies have they invested in before?
  2. What trends are there in their investment decisions?
  3. Which industries do they invest in?
  4. How much money do they typically invest in a company?
  5. What’s the average valuation of the companies they invest in?
  6. What content do they share most on LinkedIn?
  7. Which topics do they tweet about?

Allie Janoch, CEO of Mapistry, used a personalized approach in her investor emails when she was raising seed funding. In the example below, she referenced a talk her recipient’s company gave, and she explained how her startup fit in the larger idea. As a result, thirty-three percent of her pitches led to a meeting or a call.

cold investor email

Bring up unique details about the investor and connect that information to your own startup. It takes little effort, but it goes a long way toward building lasting investor relationships.

3. Tell a story

If you want investors to think about your startup after reading your email, focus on storytelling. Weaving a narrative throughout the email will make the message more memorable.

“My experiments show that character-driven stories with emotional content result in a better understanding of the key points a speaker wishes to make and enable better recall of these points weeks later,” said neuroeconomist Paul Zak.

Legal startup Atrium suggests a three-part narrative structure for fundraising pitches, based on universal storytelling concepts.

  1. The world is a certain way. Define the nature and state of the problem your company is trying to solve.
  2. Something changes. How your company is addressing this problem, and how it’s different from what’s come before.
  3. The world is now different. How your company is making a difference (use metrics wherever possible), and the work still to be done.

Consider the overarching narrative you want to tell about your startup. How did it come to be, and where is it headed? Weave these story details throughout your email to leave investors feeling emotionally connected to your startup.

4. Choose the right subject line

It doesn’t matter what the body of your cold email says. If the subject line isn’t compelling, the email will never be read by investors.

It’s easy for people to get overwhelmed by the volume of email they receive. As a result, they often make snap decisions about whether to open an email by an unknown person or just delete it. They make these decisions based on the subject line, before they ever see the content of your email. A study by Carnegie Mellon University found that people are more likely to open emails when the subject line piqued their curiosity or promised to provide utility.

Generally, you want your subject lines to be 41–70 characters long. For Shane Snow, cofounder of Contently, “short, curiosity-piquing” subject lines garnered an open rate higher than 50%.

Zendesk also offers a few specific tips for piquing curiosity:

  • Ask a question. It’s a great enticement to open the email; people will want to know the answer.
  • Share data-based insights. It’s hard to argue with cold, hard facts.
  • Convey a pain point. This will make it easier to relate to your readers’ experiences.

Avoid starting your subject line with “Re:” when you’re just starting the email thread. You might get an open if the investor thinks it’s from an existing conversation, but you’ll lose their trust when they realize that it’s a cold email.

You should optimize your subject line for opens, but it also needs to make sense. “A good cold email needs to be laser-focused from the subject to the call-to-action. Every word and sentence of the email must command the prospect’s attention and carry them to the next part of the email until they reach that last sentence, which should compel them to hit reply,” writes Heather Morgan for the FollowUp blog.

5. Use DocSend to make sure your email arrives

You might have reports, data visualizations, business plans, or other important attachments to share in your letters to investors. Though many people might attach these files directly to the email, this could have negative implications on deliverability. The email might get caught in a spam filter, for example. So even if you follow all of the above tips, one bad attachment can prevent your email from ever hitting the intended recipient’s inbox.

With a secure file-sharing platform like DocSend, you can ensure investors receive your cold emails by using a secured link instead of an attachment. You can even get real-time, actionable insights on document engagement so you can optimize future cold pitches. Start your free trial of DocSend now.