Topic 16. Building Your Investor Pipeline

Fundraising isn’t easy for any entrepreneur. It’s a complex, opaque, and often lengthy process. And by having a strategy in place before you talk to investors, it can help improve your odds of raising capital. Featured thought leader, Cody Simms, Partner at Techstars, works as a steward of Techstars’ equity investments and venture capital funds. Cody was previously head of Techstars accelerator investments and operations in North America and Managing Director of Disney Accelerator powered by Techstars. Before Techstars, he held roles including Chief Product Officer at StumbleUpon and Vice President of Product Management at Yahoo. In this module, Cody breaks down the work you should do before you begin fundraising and gives you actionable items to build your investor pipeline and improve communications with early-stage startup investors.


What's Included in this Guide:

Get Ready to Fundraise

Prepare Your Mise En Place

Target Your Investors

Communicate With Investors

Track Investor Communication

Evaluate Preemptive Offers

Let's get started
Part 1.

Get Ready to Fundraise

No matter how easy you think fundraising will be, it never is. And the more prepared you can be for an investor meeting, the better off you’ll be. This section will introduce you to the three phases of fundraising.

Fundraising isn’t easy. And no matter how smooth you think it’s going to go or the stories you hear about how much a founder raised in a short amount of time, it’s NEVER going to be easy. 

The best way to describe the fundraising process is a slog, and the more you can mentally prepare that it’s going to be a slog, and take longer than expected, the better off you’ll be. 

Fortunately, there is a lot you can do to be more prepared on the front end before you start the process. 

There are three key stages to fundraising:

  1. Who to target – identifying investors
  2. The pitch – articulating what you do 
  3. The close – how do you actually go about securing investor commitments

This talk is designed to focus on “who to target,” give you actionable items to prepare for fundraising, and how to make the most of this process.

Part 2.

Prepare Your Mise En Place

The French culinary phrase “Mise En Place” refers to having all your ingredients ready before you cook. Similarly, it’s important to have all your documents ready to go before you start fundraising. This section will help you identify all the company materials you need to prepare before talking to investors.

Before you start fundraising, you should be:

  • Investing time and energy into relationships that can be helpful to your fundraising in the future
  • Having a sense of when it might be the best time for you to consider fundraising (e.g., any key milestones you are about to achieve)
  • Preparing your pipeline 
  • Preparing your Mise En Place 
  • Developing a plan for building early fundraising momentum

Invest in Relationships & Timing

Before you think about fundraising, it’s important to build good relationships and broaden your network via mentors and other founders who have similar affinities as you. Find people who will have a natural reason to help you (i.e., common university as you, common former employer as you, same general industry focus, etc) and work to get in touch with them. Those relationships can prove to be invaluable over time.

When the timing is right and you’re ready to fundraise, I would recommend engaging your mentors, as they might have contacts, insights, and can be a support system during this process. If you do have some early investor interest but aren’t ready to fundraise, how you engage them will be key to building a relationship and reputation. 

Preparing the Pipeline

Before you begin the fundraising process, it’s important to put together an investor pipeline strategy that includes: your target investors, who can help make introductions and how much you could expect from a particular investor.  We’ll talk more about how to develop your pipeline in a later section. 

Mise En Place

In the summer I love to barbeque. Before I actually start grilling, I’ve prepared the meat, spices, marinates, and vegetables, and have all of my utensils on the table ready. This is more efficient than running back and forth to the kitchen and risk burning the meat. 

In the cooking world, this preparation process is called Mise En Place - a French culinary phrase that means having all the ingredients you need prepped, chopped, grated, etc. before you cook.  

This process also applies to fundraising and having your Mise En Place ready – all of your documents and information about your company prepared before you actually start pitching to investors. 

I recommend these materials for your Mise En Place before you start fundraising.

Materials for Mise En Place

  • Investor Pipeline: A lightweight list of investor targets that you can share with key mentors and allies.
  • Process Starter email: This is the email you’ll use to personally engage key mentors in your process. I would recommend taking time and think about your message as this email will alert your mentors that you are starting to fundraise, as well as identifies your target investors, and asks for introductions. We’ll review this in a later section.
  • Investor CRM: This is the platform you’ll use to manage your fundraising process and interactions. We’ll review a CRM format in a later section.
  • Forwardable email: This email will be forwarded by mentors/contacts to investors. This is the email you send when you are actually ready to get in front of an investor, and your contact will forward on your behalf.  We’ll review an email format in a later section.
  • One-pager (Optional): This is a quick snapshot of your company, traction and other insight that could be helpful to an investor. 
  • Emailable deck: This is a high-level pitch deck. I caution founders about sending this along because emails can be forwarded and you don’t know where it’ll end up. Typically, if founders do send a deck, they’ll use a PDF format or DocSend. (Note: I prefer PDFs as they are easier to read on the go such as on airplane WiFi.)
  • Meeting deck: This deck will provide details about the uniqueness of your company, financials, and more. It’s essential the emailable deck has more details included. Be careful sending this out to anyone who is not deeply in diligence with you.
  • Financial model: By having a well-built financial model, you can have a deeper conversation about the assumptions you have in your business. It will help you show that you’ve really thought through the things that drive your business.
  • Cap table: Make sure your cap table is up-to-date before you begin to fundraise. The last thing you want is to get to the finish line and then have a round held up due to cap table issues.
  • Data room: Your data room is a shared drive (e.g., Dropbox or Box.com) that has access controls and includes most of the key documents above such as your pitch deck, your financial model, your cap table, and other materials that you want to share with investors who are deep in diligence.

Building Momentum

When you have your investor pipeline and Mise En Place prepared, the next step will be to build momentum with investors. It’s easier to have the market push up the amount and valuation, instead of you doing the pushing and trying to raise too much capital.

Part 3.

Target Your Investors

Start thinking about investors you want to target and people in your network who can help make introductions. This section will help you build out an investor pipeline spreadsheet and get your targets organized.

When you’re thinking about investors to target, consider these factors:

  • Is your business at the stage where you will mostly be raising from angels? Seed funds? Or are you ready for a venture capital firm to set terms and lead your round?
  • What investor within a firm would best identify with your company?
  • What is the stage of the firm?
  • Does geography matter to the investor?
  • Are they revenue-focused or traction-focused?
  • Have they invested in your industry or similar companies previously?

As you target investors, begin to build out an investor pipeline in Excel or Google Sheets so it’s easy to share with mentors/contacts. 

Components to consider for the investor pipeline spreadsheet:

  1. Fund name
  2. Location
  3. Ranking
  4. Tranche
  5. Fund size
  6. Ticket size
  7. Domain
  8. Name of investor
  9. Title of the investor
  10. Contact info of investor
  11. Type of interest (inbound / outbound)
  12. Reasons why you think this investor will be interested
  13. Who can help you get a meeting
  14. Status of intro
  15. Other notes

Once you start to gain some investor traction, then transfer this to a CRM. 

Sample of an investor pipeline spreadsheet below and on worksheet: 



Part 4.

Communicate With Investors

When it’s time to actually fundraise, you’re going to need to communicate your intentions to mentors, investors, and allies. Here you’ll learn best practices for email communications with venture capitalists and angel investors.

When you are ready to fundraise, informing your mentors, existing investors and allies is important. I would suggest a one-on-one meeting with them first to review your pipeline and/or send a Process Starter email.  

A Process Starter email can be sent to your mentors, existing investors, and allies indicating you are actively raising money. It contains some context to the relationship, a few names you’re thinking about targeting, asking for their feedback and volunteering a forwardable email. 

Here is an example of a Process Starter email:

To: Cody@mentorX.com

From: CEO@CompanyX.com

Subject: Company X fundraising process

Hi Cody,

As you may recall, we are company x  in the Accelerator at Techstars [remind them who you are]. We met on August 10 during your mentor office hours [when you met].

Company x  provides [pitch, how you help customers]. We have $20,000 in MRR [traction] and since Techstars,  grown revenue 3X and secured 5 new paid pilots.

We are opening up a $$$ seed round and plan to come to LA at the end of the month [specific amount and time boxing the visit]. We’re targeting angels and seed funds [whom you are targeting] focused on revenue-generating SaaS businesses that are ok investing out of their primary geography, as we are based in Chicago [geography info].

In Los Angeles, it looks like Angel Angelino and Awesome Partner at Super Seed Fund could be a good fit [identifying your targets and asking their opinion]. Does that sound right? I would love to find 15 minutes to discuss other ideas you may have and/or if either of those two feels right I can send a forwardable email to you.

Please let me know if I can send more info to you and thanks a ton for thinking about this. Happy to also share our full investor pipeline if you’d like to review it.


Founder who is about to raise a bundle of cash 

The Forwardable Email

The forwardable email is one that your mentor/contact will be sent to an investor on your behalf. 

Components to a good forwardable email include:

  • Brevity
  • Quick and scannable
  • Relevant to the investor
  • Indicate why are you reaching out
  • Requires NO ACTION on the part of the forwarder...they should be able to do it from their phone without editing anything!

Example of a forwardable email:

To: Cody@mentorX. com

From: CEO@CompanyX. Com

Subject: Company X requesting intro to Angel Angelino

Hi Cody,

I’m writing in the hopes that you can help us with an introduction to Angel Angelino as we kick off our fundraising process. We at Company X are opening up a $$$ seed round and are targeting angels and seed funds focused on revenue-generating SaaS businesses that are ok investing out of their primary geography. Given Angel’s recent investments in Blah and YaDaYa, I think she’d find Company X very compelling.

We’ll be in Los Angeles at the end of the month and would love to meet with her. I’d very much appreciate it if you’d pass this along to her to see if she’d be willing to connect.

More info on Company X:

Company X provides customers with the best way to Bla Bla Bla. 

The reason that we believe this is a massive opportunity is that future customers have real pain, and the world is shifting to do these new things in a much more rapid timeframe than anyone anticipated and we are first to market. We have $20,000 in MRR and since Techstars, grown revenue 3X and secured 5 new pilots.


Founder who is about to successfully raise a lot of money

Part 5.

Track Investor Communication

When you are raising capital, it’s critical to track your progress with each investor so you don’t miss opportunities. Here you’ll learn how to build out your CRM to keep track of investor interactions.

Once you are in the flow of meeting with investors, it’s time to transfer your investor pipeline spreadsheet to a CRM in order to track emails, dialogues, next steps, etc. between you and investors.

Here are sections to consider in your CRM: 

  • New: Targeted investors that you’ve not yet engaged about your round
  • Advancing: You’ve had a few meetings and some back and forth
  • Soft Circled: They’re committed but may have some stipulations that you still need to satisfy before you can feel confident that they are in (most common is that they need to see final round terms take shape via whoever is setting terms)
  • Committed: Investors that you feel fully confident will be in the round
  • Legal: Working through the legal process
  • Wired: Check is in the bank
  • Passed: They’ve indicated they don’t plan to participate. Note: you may still be able to circle back as the round gains momentum and flip an early pass into a yes, so make sure to keep track of passes proactively.

Example of CRM:

Screen Shot 2019-10-11 at 8.42.38 AM

Part 6.

Evaluate Preemptive Offers

If you happen to receive an offer for investment before you start fundraising, what should you do? How should you weigh the pros and cons? In this section, you’ll learn what to consider as you evaluate the offer on the table.

There might come a time that an investor wants to invest in your company when you’re not fundraising. Here are some questions to consider if approached with a preemptive offer:

  1. Is this offer going to stop us from what we’re doing and need to complete a round? It’s rare that a firm will want to take an entire round, so often you’ll still need to fill out the round and will need to do all of the fundraising work to do so.
  2. Is the timing to take on an investor right for our business?
  3. Do we have our Mise En Place ready?
  4. Is this an investor we want as a partner for the next 7-10 years as we build this business?
  5. Is this investor someone we would have potentially targeted?