7 ways cold investor outreach beats warm intros

Most investors and experienced startup founders will tell you that getting warm introductions is the best way to connect with investors and raise money successfully. They are right, and they are also completely wrong.

They're correct when comparing the two methods in relation to a single investor. Certainly, if you can connect with an investor through a warm introduction, you're substantially increasing your chances of success. You'll likely secure a meeting or call and approach it from a strong starting point. However, if you dispatch a cold email or LinkedIn connection request to the same investor, the chances are high that you won't receive a response.

Some founders have such a significant advantage when they start raising capital for their startup that warm introductions become the simplest and fastest way for them to get funded. This could be due to their involvement in a previously successful venture, family connections, or even the fortune of connecting with one significant investor who closes their round quickly. For these founders, there's no need to embark on any cold outreach. It's a lot of work, so why would they bother?

But most founders, even founders that have successful exits in their past, quickly discover that the amount of genuine warm intros they can get is limited, and gets depleted alarmingly fast. 

They also discover that having a good connection with an investor or with someone that can make introductions to investors, doesn’t mean it is very easy or acceptable to approach them, especially if they’ve already helped in the past. In the end, you’re asking for a favor, and it gets awkward sooner or later. Making an introduction is something that many serious business people do not take lightly. It often comes with a lot of expectations, such as remaining updated on the status of the relationship with the investor they introduced you to, owing a favor, etc. 

So what do you do when you run out of warm intros? Cold outreach is your only alternative. 

Let’s consider the massive advantages cold outreach has over relying solely on warm introductions. 

Advantages of cold outreach vs warm intros to investors:

1. An Unlimited Number of Investors 

Your warm intros will rapidly deplete. Yet, the rest of the investors are still out there, limitless. So long as you continue reaching out to them systematically and effectively, you will keep meeting investors until you raise the capital you need.

2. You Lead and Control Your Destiny 

With cold outreach, you aren't dependent on favors or on other people to take action. You pave the way. You can be as proactive as you wish and keep pushing forward until you raise the necessary capital.

3. Systematize and Delegate 

The process of cold outreach to investors can be systematized. This means most of it can be delegated. If your team or a service provider knows how to reach out to investors on your behalf, your primary task becomes meeting investors and selling them on your startup's vision.

4. Own the Relationship

With warm introductions, the individual who made the introduction often remains involved, sometimes throughout your relationship with the investor they introduced you to. This means that the relationship isn't entirely yours. The introducer often expects to stay in the loop, or even to get a piece of the deal. You owe the introducer a favor as well. Sometimes, if the investor you met through a warm introduction wants to introduce you to another investor, the original introducer wants to be part of that conversation too. With cold outreach, the relationship is solely yours. Neither you nor the investor owes anyone anything.

5. No Favors or Awkward Asks 

With cold outreach, you don't need anyone's permission. You also don't need to keep track of who introduced you to whom and when. You don't need to ask for favors or feel like you're continually exploiting your personal network. You simply take action.

6. Control the Process. Wash, Rinse, Repeat. 

Unlike the haphazard activity associated with getting a warm intro, cold outreach to investors should be managed systematically. You can repeat your actions and improve them as you proceed by tweaking your search and screening criteria, adjusting your messages, and so on.

7. Scalability 

If you want to accelerate, you can. Though not without limit, you can significantly increase the number of investors you reach out to, and accordingly, the number of investors you end up meeting. Add more email accounts, send more emails, and have your co-founders and team members reach out to investors from their LinkedIn profiles.

Conclusion: Cold outreach beats warm intros by KO

When you look at the total process of raising, cold outreach is so much more useful than relying on warm intros. 

Sure, you should use your network to get a warm introduction to investors when you can. But don’t stop there. Reach out to investors directly through cold LinkedIn or email outreach. Do it systematically. Start ASAP and keep going till you get the capital you need.