How to Create an Investor Strategy for Your Pre-Seed Fundraise

Alongside your pitch deck, you need to set up an effective investor strategy. How should you organize outreach, and how many potential investors should you contact? Developing a sound investor strategy can be what takes you from having a good pitch to real fundraising success.

Contacting Investors: Choose Quality Over Quantity

“How many investors should I contact?” is a common question I get. This is actually a tricky question, because the answer usually isn’t “three,” but it’s also not “three hundred.” Here’s the rule of thumb I normally follow: if you have 30 real investor meetings and get “Nos” from all of them, then you probably shouldn’t contact another 30. Instead, you should change something about your pitch, like improving your deck or making more progress on the product.

Our latest Pre-Seed Report shows the number of investors founders contacted versus the number of investor meetings they actually had. What’s important to note is that there is a correlation between contacting more investors and getting more meetings. If you’re trying to decide between making a list of 50 investors to contact versus a list of 100, you’ll likely get more meetings with the longer list. This is one area where putting in more time will get you better results, but don’t do so blindly. If you’re going to reach out to, say, 100 investors, make sure all of them are (1) actively investing at the moment, (2) interested in your sector, and (3) funding companies of your size.

That said, the goal isn’t simply to get meetings; the goal is to get funded. And there’s not as great a correlation between the number of investors contacted and the amount raised. Contacting investors is very much a “quantity versus quality” game: try and have high-quality meetings, have meaningful conversations, get real feedback, and either get to “no” quickly or get the term sheet you’re looking for.

This approach should help put some bounds on the process for founders. Most of the companies in our dataset contacted just under 60 investors, so we’re dealing with fairly manageable numbers. Keep track of who you’re contacting in a spreadsheet, get advice from other founders, and if you hear “no” often, work hard to interpret what might be going on. Don’t simply move on to the next batch of investors before some introspection and improvement to your pitch.

Create Your Unique Narrative Using These Key Signposts

The average deck length at the pre-seed stage is about 18 pages. If you have a five-page “teaser” deck, that’s probably too short, and if you have a 40-page manifesto, that’s probably too long.

Remember that the average investor viewing time across all decks (those that successfully got funding and those that didn’t) is only 3 minutes, 40 seconds: investors have the time to absorb a lot of information, but they don’t have time to read lots of text. Your section and slide titles, along with supporting information, need to flow pretty seamlessly from one to the next because VCs will be flipping through your document relatively quickly. A lot of these views happen on mobile phones, too, which makes it even less likely that investors will zoom in on blocks of text.

We found that the average number of meetings at the pre-seed stage is 30, and the average number of investors contacted is 58. Overall, we tend not to see much deviation in these structural numbers: the narrative you put forward in your pitch will be unique to your company, but across companies the general process doesn’t vary too much. Think of these figures as a guide for building an investor strategy that makes sense for your business.

Make Considered Choices When Executing Your Investor Strategy

You’ll need to make careful decisions when executing your investor strategy. Quality over quantity is one main point to keep in mind at all times. You can’t possibly meet with every investor out there, so try to get meetings with people who have pre-screened you based on your deck. Your time is valuable: you want to avoid waiting till an investor meeting to discover that they don’t even invest in your space! Instead, you want VCs to come to the table with lots of curiosity and questions for you based on how they read your deck.

Finally, choose your investors carefully. VCs who invest in your pre-seed round will be with you for the life of your business, so pick people you like. A lot of founders I talk to are so focused on getting their round raised that they lose sight of the people behind the investments. If you get some investor interest, you’re likely going to have choices to make, either about which investors to go with or about whether now is even the right time to finalize a raise.

Watch a snippet of our pre-seed fundraising webinar for more tips.

To learn more about raising your pre-seed round, read our other posts in this series about how gender and geography can affect your raise and about how to structure a pre-seed pitch deck.