Investor Conversations 101: Icebreakers and Insights

Serial entrepreneur Dan Shapiro has done just about every form of fundraising known to man.  Across his four companies, he’s raised with friends and family, angel, VC, and crowdfunding. With his current venture, Glowforge, he’s up to his Series E round. But that doesn’t mean the journey’s been a breeze.

Even when his raises were successful, they often weren’t what they seemed from the outside. In one month, he made 68 pitches. Every single meeting resulted in a “no” until the 68th meeting. So while it looks like he did a whole round in a month, he actually crammed three months’ worth of meetings into one.

It does get better. It is easier to raise once you’ve raised successfully in the past. But how do you get over the business and rejection hump?

“The hard one is your first company. The hard one is the first time you go out [for funding],” Dan says.

On an episode of the How I Raised It podcast, Dan talks about how he raised for his first venture and how he builds relationships at networking events. Plus, he shares one question to avoid.

The grind of fundraising

Dan knows the pain of the first raise firsthand.

“I pitched my first company for nine months to anything that would move,” he says — and he raised zero dollars.

He finally found a match in a well-connected angel investor in his Seattle community. That connection opened the door to the other people who supported his first round.

Later, he launched Robot Turtles, a board game designed to help teach preschoolers coding basics. Crowdfunding was a good fit for that company. The product’s direct-to-consumer nature lent itself to being supported by its fanbase in that way. He used his own connections to spread the word about the campaign, but it ended up being the most successful crowdfunded board game at that time.

Through the Robot Turtles crowdfunding campaign, he connected with the founder of the wildly popular board game Exploding Kittens.

When Dan worked on Glowforge’s 3D printing technology, the Exploding Kittens founder ended up helping him launch another crowdfunding campaign.

From there, Dan’s fundraising journey built upon itself. New connections came along at each stage and boosted his future projects. The adage that it’s easy to raise once you’ve raised before holds true.

From happy hour networking to a real pitch meeting

As in-person networking events resume, so do the after-event cocktail hours and socials. Those events are a great way to make connections — so long as you remember to act like a human being. Dan shares how to make a good impression at an event.

The biggest mistake

Often, founders make the gaffe of spilling out their whole pitch to an unsuspecting investor at a happy hour. Remember that investors are just people, too. Instead, have a social conversation about anything but your venture.

“Investors tend to get pigeonholed. People jump on them and try to give them the pitch [during social events]. It's not the right place for the hard sell, but it's the right place to start the conversation,” Dan explains.

It’s appropriate to give a short, one-sentence summary of your product or service and end with I’d love to talk with you about it sometime.

Even if the answer is no that day, the connection could still become fruitful in the future. Stay gracious regardless of the outcome.

Be where the people are

Dan shares a story about a time when he was desperate to get in touch with a certain investor. His emails and calls went unanswered. When he found himself at the same conference in Barcelona, he made sure to “run into him” at the happy hour.

That run-in was what finally got Dan the meeting he’d been after. But rather than talk about his product first, he led with, “Oh, my gosh, you’re here all the way from Seattle. Fancy meeting you here.”

Conversation starter

Stuck on what to say to an investor? Dan isn’t above sneaking to the bathroom to Google their latest investments.

“Look for the latest news article about them. Say hey, I read the news that you just invested in so and so. That's really cool. How did you get connected with that company? Then, have a nice conversation,” Dan suggests.

Ask for feedback, not investment

Once you’ve landed a meeting, Dan recommends asking for feedback on your product, not an investment. It reeks of desperation if you ask for an investment off the starting blocks.

Instead, build the relationship slowly and take the pressure off with a product demo. Ask for the investor’s opinion. When they know more about your product and fall in love with it, they’re far more likely to be interested in investing.

Dan’s final tips

Dan wrote a whole book of tips for startup CEOs. His best advice relates to his previous homework tip. The worst thing you can do is ask do you know any investors?

“The most generous response you're gonna get is, tell me a little bit about your company and what you're doing and who you're looking for. You are the one who needs to do the homework,” Dan says.

Know who invests in your space and ask for specific connections to those types of investors. Even better, have a few specific individuals in mind. Investors are far more likely to help you out if you make the ask easy for them and show that you aren’t going to embarrass them in their network.

And while you’re at it, write a sample email for them to pass along. It’s another way to show you respect their time while sharing the load with your connection.