Fundraising · Investors

How often should I pester a potential investor who is slow to respond.

Patrick Pease

June 15th, 2015

I have an investor who seems very excited about  my product. At least he was until it came time to write a check. 

Now,  I am only able to reach him if I call 5 or 6 times or swing by his office. In the sales world we would follow up upto 6 times then call it a loss. When people have asked ME for money they don't follow up at all. So im not sure of the propper behavior. 
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Anonymous

June 15th, 2015

Agree with both Porter and Roger.  I rarely had success with anyone I had to chase more than a little bit, although I'll say big name investors with many more people pursuing them often needed more massaging (never 5-6 times tho).  Along with Roger, I agree that you need a forcing function and I had success with a rising cap.  Even if you're not close to closing out the round, you effectively create mini rounds where the cap goes up and the investment gets more expensive.  Good luck! 

Roger Wu co-founder at cooperatize, native advertising platform

June 15th, 2015

Most investors want to be last money in.  And there needs to be a sense of urgency for him to pull the trigger and wire the money.  Closing the round sometimes helps, and let him know that you'd be more than happy for him to come in on the next round .... at a higher valuation or worse terms for him.

Porter Haney CEO and Cofounder at wedgies.com

June 15th, 2015

If they aren't getting back to you they aren't interested.  I'd move on after 1 or 2 no responses. 

Steve Everhard All Things Startup

June 15th, 2015

Have you managed to validate their source of funds? Are they a high net worth angel or prospecting on behalf of others? Lots of Angel's run ranking lists based on what they saw last. Ask them for a heads of terms - it's not a legally binding document but pushes them along the path. They may well be broking you around trying to raise funds if they doesn't play with their own money.

I would add that tyre kickers are numerous in the funding world and I have met several "Angels" who have never placed a bet on anyone, yet they are still on the circuit showing interest, offering advice and murmuring about investing. Be sure that your investor has the means to complete and heads of terms may well be your best course. If they decline I would move on.

John Seiffer Business Advisor to growing companies

June 15th, 2015

I don't think there's a set formula. The right approach is whatever works and doesn't piss people off. This depends on how busy people are, how much your project is at the top of their list and as Roger Wu said there is a comfort of an investor being the last one in - there's less risk and the longer they can drag it out the more hidden problems in a company might emerge.

When you do talk to people, and they are interested (and certainly if you've had to call 5 or 6 time to connect) then I would ask them how things work at their end. Tell them you don't want to be a pest and would love to have them on board. Ask when would they like to hear back from you. Then try to nail down a date and time (Someday is not on the calendar). If they say "Let's touch base in a couple weeks" then get out your phone and say "Can we make an appointment for 2PM on Tuesday the 30th - I'll call you. Does that work?"

If they don't want to be tied down, ask if their interest is declining or if there's more info they need or what. Remember a hard NO is better than a lot of maybes. But you know that from sales. 

Jacques Cock Partner at CQRS

June 16th, 2015

The key is asking yourself have you presented with something he can act upon.

My experience as an investor and someone who has sought out investors is that if they are busy and vaguely interested they might keep you on their todo list but it will stay 10th to 20th thing to do today.

The only way to move is to create a decision or action point, only then does it move in the top three and has a chance of being effected today.

Many companies come to me and ask me to sell myself on the project by defining this and that and proposing this and that option. This is lazy and unhelpful as I have like many other people many tasks I need to do and want something that is easy to make a decision on or refine if I am not happy with it.

So my advice have a clear action, decision that he needs to take and take it to him, do not ask him to do the thinking, if he goes along and make the appropriate decision then he is interested if not then it is a clear sign to go elsewhere.

You cannot stay in this riskless, unproductive stage of interest, just like in sales you have to give him a chance to actually buy something tangible

Ami <ami.vider@gmail.com> Content Writer / Editor at FinTech/Forex start-up

June 15th, 2015

Moses didn't take 11 no-s, should you (sarcastic smile) -- in sales they use to say take the 11th NO. If you don't know the investor, and you don't have a way to get info somehow (friend, assistant, partner) - keep on trying until you are certain that you are really getting the cold shoulder. I just had a case, a buyer did not respond for 2 months. Suddenly I get "I am in the hospital, they just took out a big tumor from my lung, sorry for being out of it" -- sad story, but being 1/2 the world away in Australia, I had no idea. If you don't know, don't always assume "the worst". Try again, be persistent and polite, but never give up until you know what the other side is thinking (especially if you really want the product to get off the ground). Good luck!!!

Axel Schultze Founder Society3 Accelerator & Fundraising market place

June 15th, 2015

Patrick - an investor has most of the time three stages
1) If very interested, will work with you and invest NOW if it is clear that this is a now or much later situation
In this case he or she will pull in one or two other investors to carry the risk with them
2) Is kind of interested - will wait until there are others in as well and it is a now or never situation
3) Is dragging their feet - not really interesting - you basically are just an annoyance 

In other words if he is the only and you don't have others lined up - he will not move and you should work on either your fundraising strategy or more likely actually on your business model or other things around your company so you attract multiple investors.

Noah Shanok Entrepreneur

June 15th, 2015

You should email him with momentum updates about once a week.  The tone should imply he's already in - since that's what it sounded like to you before he went dark.  If an update is about momentum with the round ("we're close to oversubscribed and aiming to close on x date"), that's most effective.  But it's just as important to show momentum in the business.  

You want to give him the sense that the train is leaving the station AND that it's becoming a rocket ship.   

Ronis Gracie

June 15th, 2015

I've been through something similar. At one point I called the investor and said "Are you in or are you out, you gotta tell me now". He ended up investing but I agree with Roger, there needs to be a sense of urgency. Usually we as entrepreneurs are afraid to put the investor in the hot seat, but I think is a good move, it shows confidence and it shows the truth, in or out, so you don't waste time. Just don't make pressure too early, that would definitely scare him away.