I usually say the founders believe that cold emails to potential investors are not that effective. But they can work if you do extensive research and find the right one.
However, many founders skip the research phase.
Michael Bamberger is not that kind of founder.
“I’ve sent a lot of cold email in my career,” says Bamberger, a serial entrepreneur whose businesses primarily focus on the intersection of data and research. “I learned a lot about what works and what doesn’t. Basically, I built my latest business on cold email.”
That’s why he was sure of a cold outreach when he was looking for investors for his company. Tetra Insightswhich creates software for user interaction teams.
Tetra has raised $7 million to date, starting with $500,000 from friends and family in 2019 and a $1.5 million seed round in 2020. key role.
When I changed my criteria to find the right people, the process went very quickly. Michael Bamberger, co-founder and CEO of Tetra Insights
Raising Capital in Unprecedented Times
Because Michael had launched two other startups before Tetra Insights, he knew he had to test their core offering before seeking outside capital. He invested his own money to hire Tetra’s first engineer, who created the company’s MVP. Thus, when he reached out to friends and family to raise funds, he had a demo version of the product.
By raising $500,000 from his inner circle, he could start the formal seed round. By the beginning of 2020, he realized that he had stumbled upon something. “We had paying customers. We had an increase in user engagement and really positive feedback,” he says.
But when the COVID-19 pandemic hit, Michael became concerned that his R&D-focused product would not sell well in a tough economy. He stopped thinking about fundraising and instead focused on repositioning Tetra. However, he soon realized that it was “completely wrong” to suspend the search for investors. Instead, he took a new approach to fundraising: cold emails.
Michael had a strong network in the startup and venture capital community, but the investors he met with often accepted the meetings as a favor to mutual friends, not because they were genuinely interested in the UX research space. He explains that getting to know investors through warm introductions “didn’t work fast enough.” So he changed strategy by implementing a three-step process that allowed him to identify investors who would be interested in his startup.
His cold calling advice?