Definition of a cold email: A cold email is an initial email that is sent to a previously unknown receiver in order to gain a benefit in terms of favor, sales, opportunity or any other dual-sided gain. Put simply, just like a cold call, when you email someone you don’t know it is considered cold emailing.
Do Cold Emails Work?
According to Mailchimp, only 21.46 percent of business and finance emails are opened, with an average click rate of 2.72 percent, and an unsubscribe rate of 0.2 percent. Fast Company conducted a cold email study and found the reply rate was as low as 1.7 percent.
Considering this data, the pressure is on to make your cold email attempts as successful as possible from the get-go. Cold emails have a bad reputation in venture capital because they are poorly structured and can come off as begging. However, just because the success rate on a cold email is low, does not mean it is impossible to land a meeting with your target venture capitalist.
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Leverage Crunchbase data in your cold outreach to make meaningful connections, faster.
What Makes A Strong Cold Email To A Venture Capitalist?
We suggest keeping in mind two overarching principles.
- You need to hit the nail on the head with the first shot. Think, Lakers vs Spurs, 2004 NBA semi-finals, Derek Fisher (Lakers), hitting a turnaround jumper despite catching the ball with 0.4 seconds left on the clock advancing the Lakers to the finals. That is what it’s like sending a cold email to a venture capitalist (they spend more than 0.4 seconds reading, but it’s not too far off). Your job is to send a compelling email that advances him/her to the next round. The email pitch has to get the job done.
- When you’ve decided that a cold email is the way to go, it is crucial that you identify the appropriate recipient. Finding a VC with deep expertise in the market you’re targeting can drive value well beyond investment cash. Have you done your homework and focused on the “right investors?” For example, have they invested in your stage/geography/industry in the past 12-24 months? Of course, personalize your greeting and intro message to make your VC recipient feel special and that this deal/opportunity is tailored specifically to them.
Below are a few additional tips/tricks and a sample email that will point you in the right direction.
Avoid:
- A 500-word, unsolicited email.
- Lengthy paragraphs, especially when they’re not bulleted or formatted for quick reading.
- Misspellings/poor punctuation.
- Wasting time on VCs that do not invest in your type of business (a proptech firm isn’t going to spend too much time on a beauty tech startup). Also, it’s good to make sure that the VC doesn’t have a competing investment in its portfolio.
Tips:
- Subject lines matter–why should an investor open the email?
- Keep it simple and be specific about your ask.
- Everyone loves numbers and stats–they can provide quick validation.
- Clearly explain your differentiation/unique value proposition.
- Why should this attract the VC’s interest? Any VC can write a check, but what makes this VC special? Team experience? The network? Publicly known LPs? Current portfolio?
Email Structure
- Subject Line:
- Option 1: Name of your company + details of ask (Company X – Seed – Raising $5M).
- Option 2: Validation point, growth stat + details of ask (MetaProp-backed gun detection AI – 10M users in NYC – raising seed).
- Introduction: Who you are and the point of your email.
- Intro sentence: Hi, I’m Xavier, CEO & Founder of Company X.
- Two sentences: Describe your unique value prop (the problem and your solution) and why this specific venture firm would be a fit.
- Purpose: Stats that validate your product/service.
- Three to five bullet points: Highlight your traction, momentum, how much you’ve raised, and any other important stats/facts. (This can usually be pulled from the first 5 pages in your deck.)
- Link the deck to the email or attach a one pager: It’s a MetaProp best practice to use Docsend so you can track who’s viewing the deck.
- Closing: Ending statement and one call to action/ask.
- One brief closing sentence with a call to action: “Would you be open to having an introductory conversation? I’d be happy to connect.”
Example Email
Subject Line: MetaProp-backed, gun detection AI – 10 buildings in NYC – raising seed
Email: Hi Aaron,
I’m Xavier, CEO & Founder of Company X, a Metaprop portfolio company that builds computer vision software able to automatically identify gun threats and intruders with a high degree of accuracy. We’re currently working with one of the largest landlords in Manhattan to strengthen its security without investing in additional manpower. I’d love to chat about how Company X can elevate your real estate ecosystem.
Quick facts:
- Bootstrapped $1 million
- 10 million users in Manhattan
- Covering 5 billion square feet
- 5-person team
Our deck can be found here: [insert link]. Would you be open to having an introductory conversation? I’d be happy to connect.
Best,
Xavier
CEO/Co-Founder
xavier@companyx.com
Companyx.com
Aaron Block, Co-Founder and Managing Partner of MetaProp
Aaron Block builds fast growing real estate and technology businesses. Over fifteen years, Aaron has led, invested in and advised real estate services, ecommerce, education services and fulfillment firms doing business in the US, Europe, Asia and Latin America.