Inbound/outbound in sales vs. intros/outbound to startup investors

Let’s think of a new company or startup with a B2B model, let’s say an enterprise SAAS. Naturally, they would have an outbound sales strategy right from the get-go. First, for the feedback and intel, they gain from having conversations with potential customers early on. Secondly, to keep growing and adding to their pipeline of potential customers. Lastly, they would need a way to do so with pinpointed segmentation and targeting, which is one of the clear advantages of outbound lead generation, where you control who you reach out to. 

Outbound sales are also inherently difficult. Clearly, an inbound lead is more likely to convert, and the conversion and whole process start at a much stronger vantage point with an inbound lead. Still, most if not all companies with a B2B business model would not shirk from the hard work of generating outbound leads, they just cannot afford to. 

Outbound in sales vs. outbound to investors for startups raising capital

Somehow, when raising capital, you hear advice against cold outreach to investors, as if depending on your personal network to get intros + roaming with a stack of business cards in uncomfortable clothes through various events is a good enough plan. Getting an intro to an investor is great. In a way, it’s like an inbound lead for sales, so much more pleasant to deal with than going through the effort of searching and screening to find the right buyers - or investors, reaching out and following up with them to schedule a call. But it would make sense to drop the ball in it, would it? 

Which startup founders should do cold outreach to investors? 

If you’re Elon Musk, you don’t need to worry about reaching out to anyone - if he announces a new company tomorrow, investors will line up at his door. But most of us, especially in the current startup market, need to work our way to the capital we need. Reaching out to investors consistently means having a consistent stream of investors to engage with, not only for their immediate capital, but also for the network they open us to, and for the learnings we get from talking to them. 

So if you’re raising capital, start reaching out to investors. Don’t worry, they expect it, even if some of them might not be nice when they reply, and even if many ignore you. Be a worker, not a shirker. Go through the motions till you get it right, and raise the capital you need.