“‘Mutation’ is simply the term for a version of a gene that fewer than 2 percent of the population has. […] Imagine enough letters to fill 13 complete sets of Encyclopaedia Britannica with a single-letter typo that changes the meaning of a crucial entry.” A fascinating line from David Epstein. One that makes you pause and think. I apologize that this is where my mind wanders to every time I read something that stops me cold in my tracks. The world of startups, at least in fundraising, is no different.
Let me elaborate.
While this is rather anecdotal, the average VC I know takes 10 or less first meetings in any given week. As an average of 500 emails land in their inbox every week, that’s a 2% chance of having your cold message land you a meeting. And that’s not even counting the heavy bias towards warm intros. In other words, to get noticed, you have to stray from the norm. A variant. A mutation.
The good news about being a mutated monkey with two left ears and an overbite hosting two dozen fangs is that unlike in nature, you can genetically modify and give birth to a mutated product of your choosing. While I probably could’ve used more floral language, I realize I’m also not writing a rom com, but a documentary capturing the cold realities of an investor’s virtual real estate. That has more eyes trying to peer into it than it has time, space, and most importantly, attention to open doors.
Your appearance on that stake of land is your debutante ball. The question is how will you grace the ballroom floor among a sea of people who have access to the same town tailors, dressmakers, and dance instructors as you do. A name. A subject line. And at most 50 characters to make a first impression.
The short answer is you don’t.
I also understand that in writing a piece on how to stand out in an investor’s inbox, I run the risk of sounding like every other Medium article who’s covered this topic before me. So, instead of sharing the five steps to get every investor to open your email, I’m going to share three examples, starting with some initial frameworks of how and some of my favorite thought leaders think about narratives.
As a compass for the below, I’ll share more about:
- Why the product for investors is different from the product for your customers
- The 3 kinds of fundraising pitches and the most important one for investors
- The 3 archetypes of distribution channels and which email falls under
- 3 examples of non-obvious channels
For the purpose of this essay, I’ll focus on cold emails, rather than warm intros. But many of the below lessons are transferrable.
The investor product
Blume’s Sajith Pai recently wrote a great piece detailing on what he calls the investor product. And how that is different from the content product — what customers see and hear — and the internal comms product — what your team members see and hear. Even in my own experience, I see founders often conflate at least two. They bucket it into the internal story… and the external story — bundling, ineffectively, the investor and content product.
In short, the investor product is the narrative that you tell your investors. A permutation of your personality and your vector in the market in a sequence you think investors find most compelling. That narrative, while not mutually exclusive, is different from the story you tell your customers. For customers, you are the Yoda to their Luke Skywalker. For investors, you’re the Anakin to the Jedi Order. The future.
Not all pitches are created equal
Just like expository writing differs from persuasive writing which differs from narrative writing, there are different flavors of fundraising pitches as well. Kevin Kwok boils it down to three.
- Narrative pitches: What could be. What does the future look like?
- Inflection pitches: New unveiled secrets. In Kevin’s words, for investors, “now is the ideal risk-adjusted time to invest.” Why is the present so radically different? Why is the second derivative zero?
- Traction pitches: Results and metrics. How does the past paint you in glorious light? Admittedly, people rarely index on the past. So, traction pitches are on decline. It’s akin to, if someone were to ask, “What is your greatest accomplishment?” You say, “It has yet to happen.”
The truth is most early-stage founder pitches are narrative pitches, focused on team and vision. But the most compelling ones for VCs are inflection ones. One of my favorite investor frameworks, put into words by the an investor in the On Deck Angels community, is:
Do I believe this founder can 10x their KPIs within the funding window?
The funding window is defined as usually 12 to 18 months after the round closes. And usually the interim time before a venture-scale company goes out to raise another round. In order to 10x during the next 12 to 18 months, you have to be on either a rising market tide that raises all boats, or more importantly, the beginnings of the hockey stick curve in your product journey. Do you have evidence that your customers just love your product? For instance, for marketplaces, that could be early organic signs as demand converts to supply. In other cases, it could be the engagement rate post-reaching the activation milestone.
What channel does the pitch land in
While the message — the narrative — is important, the channel in which the pitch is received is just as, if not more important. As Reid Hoffman once wrote, “the cold and unromantic fact is that a good product with great distribution will almost always beat a great product with poor distribution.”
The truth is that email is a saturated channel.
While Figma’s Naira Hourdajian notes that this applies to any form of communications, not just politics, she put it best, “Essentially, when you’re working in politics, you have your earned channels, owned channels, and your paid channels.”
- Owned — Anything you control on your own channels. Your website, blog, your own email, and in a way, your own social channels.
- Paid — Anything you put out into the world using capital. For instance, ads.
- Earned — Because others are not willing to give it to you and that it is their real estate, you have to earn it. Like press and in this case, others’ email inboxes.
On an adjacent point, the thing is most founders don’t spend enough time and effort on owned and earned channels when it comes to the content product. Both are extremely underleveraged. Many think, especially outside of the context of fundraising, and within go-to-market strategies, think paid is the only way to go. While powerful, it is the channel that carries the most weight post-product-market fit. Not pre-.
In the context of fundraising, I always tell founders I work with to always be fundraising, just like they should always be selling. There’s a saying that investors invest in lines, not dots. But the first time you pop up in someone’s inbox is, by definition, just a dot. Nothing more, nothing less. Rather, you should start your conversations with your future investors before you kickstart your fundraising. Ask for advice. Host events that you invite them to. Interview them on a podcast or a blogpost. Feature them in a TikTok reel. (Clearly, I spend the bulk of my time with consumer startups).
As you might have guessed, sometimes it has to be outside of the inbox. To get their attention, there are two ways you can pick your channel:
- Target powerful channels in an innovative way,
- Target powerful, but neglected channels,
- And, target new and upcoming channels.
As such, I’ll share an example for each.
Powerful channel used in an innovative way: Email
In one of Tim Ferriss’ 5-Bullet Friday newsletters recently, I found out that Arnold Schwarzenegger handwrites all his emails.
It’s brilliant. Genius, I might say. I don’t know how much intentionality went into why Arnold does so, but here’s why I think it’s brilliant.
If you’re sending it to someone who owns a Gmail, you’ve just given yourself 100% more real estate (albeit ephemeral) in their inbox. If their inbox is set on Gmail’s default view. Additionally, via the attachment name, that’s 10-15 characters more of information you can share at just a glance. Or at the minimum, if they’re reading via the compact view, an extra moniker that most emails do not have. A paper clip. To a reader’s eyes, it draws the same amount of attention as a blue check mark on Twitter or Instagram.
Once they click open the email, instead of plain text, your reader, your investor, sees font that stands out from all the other email text. A textual mutation that leads to curiosity. Something that begs to be read.
Powerful, but neglected channel: Physical mail
When I started in venture, I didn’t have a network, but I knew I needed one. Particularly, with other investors. After all, I didn’t know smack. I quickly realized that email and LinkedIn were completely saturated. One investor I reached out to later told me that he doesn’t check his LinkedIn at all, since he got 200 connection requests a day. So, it begged the question: Where must investors spend time but aren’t oversaturated with information?
Well, the thing is they’re human. So I walked through every step of what a day in the life of an average human being would go through, then guesstimated if there were any similarities with an investor’s schedule. Meal time, time in the bathroom, when they were driving or in an Uber (but I don’t run a podcast they’d listen to). And, like every other human being, they check their physical mail. Or someone close to them, checks them.
I knew they had to check their mail for their bills (a surprising number of investors haven’t gone paperless). But it couldn’t seem sales-y because they or their spouse or assistant would immediately throw it out. That’s when I decided I would write handwritten letters to their offices.
The EA is the one who usually sorts through the stack, and is someone who also doesn’t get the attention he/she deserves. Nevertheless, I believed:
- Handwritten letters are going to stand out among a sea of Arial and Times New Roman font.
- The envelope had to be in a non-white color to stand out against the other white envelopes. So, I went to Michael’s to buy a bunch of blue and green envelopes. Truth be told, I thought red was too much for me, and often carried a negative connotation.
- The EA or office manager has to deem it not spam or marketing, so including a name and return address is actually a huge bonus, AND a note that doesn’t seem market-y on the envelope (i.e. thank you and looking forward to catching up).
At the end of the letter, I’d write I’d love to drop by and meet up with them in the office. Then I’d show up at their office within the week, and say, “I’m here to see ‘Bob.'”
The EA would ask if I had an appointment, and I would say that he should’ve received a letter in earlier in the week that let him know I would be here. Then, the EA would go back and ask if ‘Bob’ was free. If not, I’d wait in the lobby until they were, without overstaying my welcome. If they weren’t in the office, I’d ask to “reschedule” and book a time with them via the EA. Which would then officially get me on their calendars.
New and upcoming channel: Instacart
In a blogpost I wrote in 2021, I recapped how Instacart got into YC:
Garry Tan and Apoorva Mehta have both shared this story publicly. Apoorva, founder of Instacart, back in 2012, wanted to apply to Y Combinator. Unfortunately, he was applying two months late. So he reached out to all the YC alum he knew to get intros to the YC partners. He just needed one to be interested. But after every single one said no, Garry, then a partner at YC, wrote: “You could submit a late application, but it will be nearly impossible to get you in now.”
For Apoorva, that meant “it was possible.” He sent an application and a video in, but Garry responded with another “no” several days later. But instead of pushing with another email and another application, Apoorva decided to send Garry a 6-pack of beer delivered by Instacart. So that Garry could try out the product firsthand. 21st Amendment’s Back in Black, to be specific. In the end, without any precedent, Instacart was accepted. And the rest is history.
In the above case, Instacart in and of itself was the emerging platform of choice. The application portal and email here were both saturated and had failed to produce results. What I missed in the above story is that the 6-pack arrived cold, which meant that the product worked and could deliver in record time. A perfect example of a product demo, in a way the partners were least expecting it.
In closing
Siddhartha Mukherjee once wrote: “We seek constancy in heredity — and find its opposite: variation. Mutants are necessary to maintain the essence of ourselves.”
Variation — being different — is necessary for the survival of our species. That’s what evolution is. That said, what worked yesterday isn’t guaranteed to work tomorrow. ‘Cause that same mutation that enabled the survival of a species has become commonplace. The human race, just like any other species, replicates what works to ensure greater survival.
The same is true for great ideas. A great idea today — even the above three — will be table stakes at some point in the future. Thus, requiring the need for even newer, even more innovative ideas. Hell, if it’s not via my blog, it’ll come from somewhere else. With the rise of generative AI — ChatGPT, Midjourney, Dall-E, you name it, if you’re average, you’ll be replaced. If you don’t have a unique voice, you’ll be replaced. Some algorithm will do a better and faster job than you will. As soon as more people start using the afore-mentioned tactics, the above will no longer be original. As such, I don’t imagine the case studies will age well, but the frameworks will. That said, the only unsaturated market is the market of great. To be great, you must be atypical. You must go where no one has gone before.
Interestingly enough, Packy McCormick wrote a piece earlier this week on differentiation which I recommend a read as well. From which, I found two of the above quotes.
For those interested in startup pitches that stand out, specifically how to think about compelling storytelling, I highly recommend two places that inspire much of my thinking on the topic:
- Brandon Sanderson’s Creative Writing lectures — which is completely free
- Malcolm Gladwell on Masterclass — admittedly does require $15/month subscription
So, if you are to have one takeaway from all of this, it’s that it’s easier to explain different than to explain better.
Seek variation.
Photo by JF Martin on Unsplash
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Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.