How Startups Can Use an Investor Matching Tool to Secure Funding
Raising capital for a startup is challenging. At Visible, we like to look at the fundraising process similarly to a traditional B2B sales and marketing process — like a funnel.
- At the top of the funnel, you are finding potential investors via cold outreach and warm introductions.
- In the middle of the funnel, you are nurturing potential investors with meetings, pitch decks, updates, and other communications.
- At the bottom of the funnel, you are working through due diligence and hopefully closing new investors.
In order to give yourself the best odds of raising capital, you need to have a healthy “top-of-funnel” filled with qualified investors. There are a number of different ways and sources you can use to find investors for your fundraise. Check out how an investor matching platform can help below.
What is an Investor Matching Platform?
An investor matching platform is a tool that founders can use to find qualified investors for their business. On the flip side, investors can use an investor matching platform to find qualified deal flow for their business.
An investor matching platform typically involves profiles for both investors and founders with firmographic information. These are used to help founders find investors that are a fit for their business.
Related Resource: How To Find Private Investors For Startups
Benefits of Using an Investor Matching Tool
The average founder has 48 investors in their Visible Pipeline. Many VCs and thought-leaders recommend that founders target 100+ investors over the course of a fundraise. Check out the number of investors a founder should expect to target below:
In order to fill your fundraising pipeline with 48+ investors, it is important to have plenty of opportunities to find potential investors.
Related Resource: A Step-By-Step Guide for Building Your Investor Pipeline
This is where an investor matching tool can help. Check out more benefits of an investor matching tool below:
1. Wider access to potential investors
As we’ve mentioned above, a fundraise typically requires a list of 48+ investors. A matchmaking tool can be a great resource to help find the right investors for your business. In the past, most founders have had to look to their immediate network for introductions to potential investors (or cold email) — a matchmaking tool allows you to widen your pool of potential investors.
2. Time and resource savings
Finding potential investors can be a time consuming process. You need to identify your needs, find the investors that fit your needs, then find an introduction or write a personalized cold email.
With a matchmaking tool, you can quickly find investors investors that are the right fit for your business using filters.
3. Data-driven matching
Finding investors is similar to finding the right leads for your sales and marketing team. In order to find the right investors, you need to use data and criteria to find the investors that are a fit.
With Visible Connect, our free investor database, you can filter investors using fields and data, such as the following:
- Investor check size minimums and maximums
- Investor stage focus
- Investor sector/vertical focus
- Investor fund size
- Investor geographic focus
4. Streamlined communication and negotiation
Some investor matching tools have communication built directly into the platform. This allows for quick introductions and a quick yes/no from potential investors. While this can save time and streamline communication this can also come with downsides. For example, potential investors have the ability to pass on your business with little explanation or knowledge.
5. Increased credibility
Some investor matching tools require a vetting process for both founders and investors. This leads to increased credibility and ensures both parties that they are talking to a credible person.
6. Community and networking opportunities
A fundraise requires conversationsn with many investors, peers, and leaders in the space. While most investors will pass on your business it can lead to an increase in your network. For example, some investors might pass on your business because it is too early stage, this is an opportunity for you to build a relationship with this investor over time.
How to Get the Most Out of an Investor Matching Platform
For many investor matching tools, you will get out of it what you put into it. You’ll want to approach it with a plan for your fundraise that can be used when finding potential investors. Check out a few examples to make sure you’re getting the most out of your investor matching platform below:
Related Resource: 20 Best SaaS Tools for Startups
Define your needs
First things first, you should define what you are looking for out of a fundraise and start to build out what your “ideal investor” looks like. This typically means identifying the criteria you’d want out of your investor — check size, stage focus, vertical focus, etc.
Build a strong profile
If your investor matching tool requires a founder/company profile, make sure it is built out. For many investors, this will be their look into your business and how you operate. If your profile is half built out, they will assume you are not taking it seriously.
Proactively engage with investors
Investors receive hundreds of emails and messages from potential investors every month. Chances are that your initial messagse could get lost in the shuffle. Make sure you are proactive and have a plan to follow up as needed.
Be transparent
If you are using an investor matching tool, chances are this will be your first interaction with many of the investors. In order to build trust, you need to start the relationship with transparency. Be honest about where your business is at, what you’re looking for out of potential investors, etc.
Keep your information up-to-date
As we mentioned above, your profile will be a potential investors first look into your business and how you operate. Make sure that your information is up-to-date and relevant. If an investor sees that your information is months or quarters old, they will question how you operate.
Match With the Right Investors With Visible
As we mentioned at the beginning of this post, a venture fundraise often mirrors a traditional B2B sales and marketing funnel.
Just as a sales and marketing team has dedicated tools, shouldn’t a founder that is managing their investors and fundraising efforts? Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms.
Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days.
