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Should I Send My Business Plan To Every VC Firm I Have An Email Address For?

Q: Is it a bad idea to send a business plan to too many VC firms? I have access to a large list of VCs that invest in my type of company and I was thinking about blasting out a business plan to all them. My thought process is it is a numbers game and the more people that see it the better the odds are that someone will be interested in it. I am just a little worried about the intellectual property side of things and by sending it to too many firms it could be vulnerable.

A: (Brad) This is a terrible idea.

First of all, don’t send your full business plan in your first email to a VC.  Instead, send a short overview (in the text of the email) and an executive summary.  A VC should be able to quickly determine whether or not he wants to spend time with you from this information.

More importantly though, simply sending your business plan (or overview) out to a large number of VCs with whom you have no relationship with is unlikely to yield any results.  When you are raising money, it’s a "quality" game, not a "numbers" game.  The higher quality your introduction, the greater the change you will get an audience from a VC. 

Some VCs take a look at every email that comes in over the transom (I do – and I always try to respond.)  However, if it’s a totally cold, random, "Dear Sir" type email, I give it less weight than if an introduction is made by a colleague that I know and respect.  While there is a range that varies based on how busy I am at any particular moment, what kind of mood I’m in, and whether or not my dog woke me up too early in the morning, some sort of connection to someone or something I know is always better.

Finally, I wouldn’t worry to much about the intellectual property side of things.  Even though the theme that "VCs steal entrepreneurs ideas" seems to go around the system regularly, my experience (as an entrepreneur, angel investor, and VC) is that this is an urban myth.  Most VCs will simply ignore your email blast.

May 21st, 2008 by     Categories: Uncategorized    
  • http://newmanva.com/blog arinewman

    Great advice – only thing I'd add is “do your homework” and make sure your introduction is going to the right partner at the firm that is looking or interested in your market. The more forwards on the email, the colder it gets I have found.

  • Mike R.

    Absent an introduction, we've had some very good luck going to alumni events and other types of networking events. I'm positive that meeting face to face at first has opened doors for us that an email blast never could.

  • Ken Feldman

    While Brad is nice enough to respond to a “cold call” pitch (geez, Brad, that's great), usually you will get little if any attention. Over and over again I have found the following:

    Investors put their money in who they know and what they know.

    Do you're homework, as arinewman posted above. Some tips.

    (1) Make up a hit list of potential investors, look at what they do invest in and what they do NOT invest in. No use pitching web investments to a bio-tech focused VC.

    (2) I strongly recommend that you do not send your plan to VC's who have investments in a competitor or potential competitor. The less scrupulous firms will bring you in for the pitch just so they can get a read on what your plans are and assess the threat, with no intention of investing.

    (3) Determine the partners who will understand what you are doing, who “know” your space, then use LinkedIn or the like to find out who in your network can make an introduction.

    (4) Want that face-to-face meeting? Go to conferences where the VC's flock and working the lobby. I've done this with great success, made some excellent connections.

    Maybe you didn't go to college with the Partner, or you weren't at startup they previously invested in, but it is important to make some kind of associative connection, so at least they will say “oh, I know that guy”. This will significantly increase your odds of success.

    • http://www.feld.com Brad Feld

      Ken – all great comments. #2 is especially important – it's remarkable how many business plans gets “passed around”.

  • Maria Marsala

    Great advice. In my travels as a coach, I meet many VC/Angels. I hear often that they throw unsolicited business plans away. I bet that within your contact database or linked in account, you have connections who know or are VC/Angles that you can get to know. I bet that you already know one or two that you don't realize right now.

    Do your homework as many also have websites. You might have a list; however, even though you have a targeted list, there are still those who are better for what you're looking for now — and better for where you want to take your company, too.

    In many areas of the country there are organizations that VC's attend; those who target start ups. Also look at your local newspapers, many times they have a writer or blogger who stays on top of the VC/Angel beat where you can learn of local events, groups and names of those in the industry.