I usually tell founders that cold emails to prospective investors aren’t all that effective. But if they extensively research and find the right fit it can (and will) work.

A lot of founders skip the research phase, though.

Michael Bamberger is not that kind of founder.

“I've done a lot of cold email in my career,” says Michael, a serial entrepreneur whose ventures have focused mostly on the intersection between data and research. “I've learned a lot about what works and doesn't work. I built my last business on cold email, basically.”

That’s why he was confident about cold outreach to find best-fit investors for his company Tetra Insights, which builds software for user experience (UX) teams to turn research into shareable insights.

“Our software allows companies to use qualitative data from their user insight practice as effectively as they're using their quantitative data to make decisions,” Michael explains on an episode of the How I Raised It podcast.

Tetra has raised $7 million to date, beginning with $500,000 from friends and family in 2019 and a $1.5 million seed round in 2020. Michael and his cofounder Panos Rigopoulos raised a $5 million Series A that closed in September 2021 — with cold emails playing a pivotal role in his strategy. We talk about Michael’s fundraising journey and share how to do cold outreach with confidence.

Raising capital in unprecedented times

Because Michael launched two other startups prior to Tetra Insights, he knew he had to validate its core offering before seeking outside capital. He invested his own money to hire Tetra’s first engineer, who built the company’s MVP product. That way, when he approached friends and family to raise funds, he had a version of a product to demo.

After raising half a million from his inner circle, he could begin a formal seed round. By the beginning of 2020, “I knew I was onto something with my business,” he says. “We had paying customers. We had users growing their engagement and really positive feedback.”

But when the COVID-19 pandemic hit, Michael worried that his R&D-focused product would be a hard sell in a tough economy. He stopped thinking about fundraising and instead focused on repositioning Tetra. However, he soon realized that pausing his search for investors was “completely wrong.” Instead, Michael leaned into taking a new — and surprising — approach to fundraising: cold emails.

Match game: Venture capital edition

Michael had a strong network in the startup and venture capital community, but the investors he met often took meetings as a favor to a mutual friend, not because they were actually interested in the UX research space.

The process of meeting via warm intro wasn’t “working fast enough,” he explains. He refocused his approach and changed strategy, implementing a three-step process that allowed him to identify investors that would be interested in his startup.

His advice for cold calling?

1.  Do your research to find best-fit potential investors.

Michael set out to find investors who matched well with Tetra: “focused on B2B SaaS, invest outside of the coasts, have experience with businesses at our stage, that maybe [have in their] portfolio companies already dealing with video technology or some elements of what we're doing with user experience technology,” he says.

2. Lean on network-based resources to source leads.

Armed with subscriptions to CrunchBase Pro and Foundersuite, Michael built a list of prospective investors. He cold-emailed five funds the first day he began his outreach. Two hours later, one of them replied with interest, proposing a call two weeks later. One of his lead investors came from that first batch of cold emails.

“When I changed my criteria to finding people who were a fit … the process was really quick,” he says.

3. Use your research to develop a compelling message.

Michael thinks that the success of cold outbound efforts depends on how well the message is crafted — and researched, which helps founders know what prospects care about. He tailored his subject line to fit with investors’ interests.

Cold email with a warm touch

Here, Michael shares the exact cold email he sent to investors that he and his cofounder identified as possible matches for Tetra Insights. A few details, such as revenue numbers, are omitted for confidentiality.

Subject line: RE: Pre-seed round? B2B, SaaS, qualitative data analysis

Hi ___,

First and foremost, I hope you and your family are safe, healthy and as comfortable as possible during these crazy times.

I'm the co-founder of Tetra Insights, a B2B SaaS startup based in Boulder. I'm reaching out to see if you're available for a 30-minute call to learn about our company.

We are raising a round of financing and I want to introduce myself to see if we might be a good mutual fit. Our transfer software transforms audio and video into business intelligence.

We launched in January and generated X number of revenue while in beta RMRS. Currently why from companies including LexisNexis, Yara and Segment where our technology powers their customer insights practices.

We have a great team. Our customers love our products. We validate our enterprise use cases. We're raising this round to accelerate our product development and go to market efforts.

Below are links to our one-pager and deck.

If you'd like some background info, please let me know if Tetra sounds like a good fit.


The power of story (and an open calendar)

Michael says fundraising is a lot like the sales process, and we should treat it as such:

  1. Run prospective investors through a funnel
  2. Develop promotional materials with care
  3. Create urgency
  4. Be proactive.

He advises focusing on fundraising “above everything else” while actively seeking capital. It’s a time-consuming process, so keep your schedule flexible enough to meet even at a moment’s notice.

Looking back on his unorthodox cold-email approach, he sees a straightforward integrity to it: He decided “not to use relationships to close a deal,” but instead to use the merit of Tetra’s concept and his passion for the work.

When you do land a meeting, “the story is what sells,” Michael adds. “Once you get investors, the story doesn't matter; it's all about the metrics, the numbers and the performance. Before the investment the numbers are just part of the story, so you really have to understand how you're telling the story.”

Nathan Beckord is the CEO of Foundersuite.com, which makes software for startups raising capital.

Nathan is also the CEO of Fundingstack.com which is a new platform for VCs and investment bankers to both raise capital and assist clients and portfolio companies.

Users of these platforms have raised over $9.7 billion since 2016.

This article is based on an episode of Foundersuite’s How I Raised It podcast, a behind-the-scenes look at how startup founders raise money.