According to Zivity co-founder Cyan Banister you should never talk to investors about your business in public… ever. By Cyan Banister (Founder, Zivity/Signal Media Project & Investor, Banister Capital)
Here's a valuable tip that many people don't know: Investors do not want you to pitch them direclty about your startup either in person, via email, carrier pigeon, postal mail, fax or whatever clever ways you've dreamed up to reach them.
Some investors are gracious in public and they will listen to you for a few minutes, take your business card and then excuse themselves. Your card might end up with the lint in their dryer, in an ever-growing stack of cards on their desk, or in the trash bin. Some investors will give you some path in which you can interact with them, which basically is a path to nowhere - an associate or admin who will politely decline your opportunity, so at least you feel kind of good about the whole interaction. Most people will just toss your card and hope to not run into you again.
Pitching an investor at a conference, in a bathroom (yes, people have done this to multiple investor friends of mine), at a dinner or social event, or over email generally is a horrible waste of your time and theirs. It is also a great way to leave either no impression or a bad impression about yourself and your company.
Network or Nothing
This may seem weird. You might think, "Those people are in the business of looking for people like me, so why would they be that way?! It is their job to be pitched!"
Well, sure, but not that way. You see, most investors like to receive introductions from trusted associates, discover you on AngelList or watch your pitch on a demo stage. None of these methods involve talking to you until they know they have some level of interest in you or your company.
So, how does one get a magical introduction? Through your network. Don't have a network? Well, you probably won't succeed in building a world-class business without a network. I mean, how will you do recruiting? Even if you are recruiting without a network, and that isn't optimal for similar reasons, you should be building a network along the way.
If you can't network your way to the investors you want, it is almost guaranteed that you won't be able to network your way to the people you ultimately need to hire either.
Everyone you know is potentially part of your network. Who do you know that might know someone that might know investors and may think that what you are doing is valuable? Who have you worked with in the past? Who have they worked with? LinkedIn can help you answer all of these questions!
If you find yourself deficient in these connections, then while building your product, also build your human capital. You can do this by helping other people. Sometimes you have to give before you get. At the end of the day your network is based on relationships, not just a LinkedIn graph.
Forget the Pitch. Go With a Blurb
Once you find this person who can introduce you, what is the best way for them to do it? The best way I've found is for you to write a blurb for them and they forward it with a snippet about how they know you and why they think what you are doing is fund worthy. If the investor is interested, they will ask for the introduction. If you write a poor blurb, then I wouldn't expect an answer even with that warm introduction. That's pretty much a blown opportunity.
If you must talk to an investor in public, politely get their business card and walk away. Nothing you say during that time will matter.
I know this seems harsh, but it is the truth. I wrote to several investors about the best way to approach them and 100% of my responses were: trusted referrals. So, every article you see from this point on that talks about the ultimate pitch? Unless it is for a stage, just think: ultimate blurb.
Have you ever had success approaching an investor 'in the wild'?
About the guest blogger: Cyan (@cyantist) is the founder and Editor-in-Chief of Zivity, a prolific angel investor with her husband Scott Banister, board member, advisor and also a contributing writer for TechCrunch. She currently serves on the board of directors for Mimoco.