Finding a Lead Investor for your Pre-Seed or Seed Round
Background
Before we get started, I’ll share a bit about myself so you know who you might be taking some advice from. I’m a third time founder/CEO with a background in CS and 20+ years of tech and startup experience. I sold my first company (Pursuit.com) to Meta as a talent acquisition, I sold my second company (DocSend.com) to Dropbox when it was a profitable business and I’m now on my third company, called Distill. The below process and guide are informed by thousands of data points from my time building DocSend as well as angel investing in and advising nearly 100 startups.
Who this guide is for: This guide is intended for first-time, early stage startup founders who are about to raise their first formal round of funding. Maybe you’ve raised a small friends and family round or put in some of your own money, and now you’re looking for a larger check to get your company to the next stage. If you’re looking to raise $500k+, this is typically a Pre-Seed or Seed round (more here on the dollar amounts involved with each round). For these rounds, it is very helpful to get a lead investor who will take the majority of this and to then fill in the rest with smaller investors. I’ve put this together to make the process of researching investors, getting a lead and raising this first formal round of capital more approachable and less time consuming.
Why focus on a lead
If you’re raising just a $100k friends and family round, you don’t need a lead investor as you can just put together a few smaller checks on a convertible note and give everyone reasonable terms. Once the dollar amount becomes larger, though, say like $500k+, it becomes increasingly difficult to put together enough small checks. This is the point where as a founder you’ll want to consider raising a more formal Pre-Seed or Seed round from someone with a bigger checkbook. To note, often there is not a lead investor listed for pre-seed rounds so when doing your research just look for VC funds that invest in pre-seed rounds.
The people who have this larger checkbook are VC funds who are in the business of investing in Pre-Seed and Seed rounds. Convincing one of these to be your lead is the key to successfully raising because once you have a lead, it’s relatively easy to fill in the rest of the round. Until you have a lead, everyone else is just pitch practice.
The reason it becomes easier once you have a lead makes sense once you see how it works. From the standpoint of an investor who joins post-lead, someone else has already done the heavy lifting of being the first to commit, putting in the biggest check, researching the space the startup is in, looking at competitors, doing diligence on the idea or tech, and background checking all of the founders. So for an investor who’s joining after you have a lead, it’s both a safer bet to make and it’s dramatically less work.
What it means to be a lead
Typically, a lead investor is a VC fund that defines terms for your fundraise and takes at least half of the round. Compared to an angel investor or a fund that doesn’t lead rounds, this VC fund will do significantly more diligence on your startup and on you personally. They’ll typically get to a decision quickly since this is their full-time focus. They also rarely take up the full round so that you can include other investors who can also be helpful to you.
What it takes to get a lead
Fundraising is something you’ll want to give your full attention to, especially since you’ll go through the process again later and might as well get better at it now. Although finding a VC fund to be your lead investor is a bit of a numbers game (ie you’ll want to pitch 20-30 funds), it’s mainly about making sure the funds you target are a fit for your stage and what you’re working on. I’m always surprised by how much time early stage founders spend pursuing investors who just aren’t a fit for them. The key to finding a lead investor is to focus on pitching VC funds that are the best fit for what you’re building. This starts with educating yourself on what factors matter and then doing a significant amount of research before you even start your outreach.
The Overall Process
The most successful formula I have found for getting a lead investor can be boiled down to these steps, each are outlined in more detail below:
Do your research: find the VC funds who will be the most excited about you
Have a schedule: prioritize your pitches, plan them out and have a deadline
How to get meetings: do compelling and thoughtful outreach
Be prepared: first impressions matter so know who you're pitching
Do your research
Although Distill is a general purpose tool, in this section we’ll walk you through how to use it to find and research the lead VC funds that are the best fit for your startup. You’ll end up with much more thorough and accurate research in a fraction of the time (thanks, LLMs!).
Before we get to searching for investors in Distill, we’ll go over some of the factors worth considering when deciding if a VC fund is worth pitching. This is incredibly important legwork to make sure you’re putting your later effort where it counts the most. You’ll notice that there’s no criteria for “Tier 1 VC” or anything like it, which is on purpose (more on that here).
Funding Stage: what stage a VC focuses on
VC funds tend to focus on a specific stage of investing, which goes hand in hand with how large their fund is. If you’re raising a Pre-Seed or Seed round, it‘s safest to target VC funds that focus on one or both of these stages. Although later stage and larger VC funds often say they do early stage investing as well, it’s just not their focus. That being said, although a later stage investor is unlikely to lead your round they are still worth pitching now for feedback and to start a relationship.
If you don’t have a product yet or if this is your first startup, then in Distill you will likely want to start by searching for VC Funds focused on Pre-Seed. If you already have some traction, or you are in a hot space, then you’d probably want to check only the option in Distill for Seed focused funds. In practice, I’ve often seen founders pitch both and usually they find out quickly based on feedback if they are at the Pre-Seed or the Seed stage of funding. The line between these is blurry and the only real difference is the terms you can persuade a VC fund to offer you. More on the difference between Pre-Seed and Seed below. Wondering which stage your own startup is at? Use this handy guide.
Lead VC: if the VC fund can lead a funding round
If you’re talking with an angel investor, they will typically be very clear that they will not lead your funding round. If you’re talking with a fund, a strategic or a family office it can be much less clear. If you’re already talking with one of these, you can simply ask them if they lead investment rounds or usually follow on. If they say “yes” or “sometimes”, it’s best to ask them how many deals they have lead in the last year and what percentage of their investments they typically lead. In Distill, when you check the box on “I'm looking for a lead investor”, that means one or more startups has reported that the investor led their round of funding in the past year or the investor has explicitly stated that they intend to lead rounds. This criteria is a great way to narrow down who you focus on talking with. There are quite a few funds, strategic investors and family offices that explicitly don’t lead investment rounds. They can still be a great fit for you once you have a lead and are looking to fill out the remainder.
Startup sectors: what areas a VC fund invests in
Startups in Distill are almost all tagged with one or more sectors, which is great when you're looking at a fund's investments page to see what they invest in. For example, you can see pretty clearly on the profile for a16z that they invest in a lot of sectors but Enterprise Software and SaaS is by far the highest by count lately. You should definitely put in the relevant sectors for your startup, this will likely not be specific enough by itself to narrow down your list. If you’re doing your research manually, or just want to dig into how to interpret a VC fund’s sector focus, more info here.
Keywords: how to tell what they really care about
One very cool part of Distill is that it indexes everything about a person or company that can be found online. So for a VC fund, for example, Distill also indexes everything on their website, everything they write and even all the articles they are mentioned in. When searching for VC funds or for individual investors, you will want to make sure you add a filter for keywords and put some thought into what you enter on your list. Better to go a bit broad and then dial it back if needed. The best way to know if a VC will care is if they have been recently writing about what you're working on. It's also an amazing power move to reach out to an investor saying that you happened to be solving the exact problem they were recently complaining about on X.
Geography: a tricky question
If you are live in the USA and have your startup incorporated in the USA, then you aren't going to have an issue with geography. You still might want to search for partners who are based close by (like in NYC if you're also in NYC) but it won't be a deal breaker if a partner is in SF and you're in Austin.
If you live outside the USA, then it gets trickier. If your startup is still a Delaware C Corp (or at least incorporated in the USA) then living outside the USA isn't always a deal breaker. The trickiest situation is when you're also incorporated in another country. Having invested in a couple of German startups, I know firsthand how much overhead this can cause and my funds will decline out of hand (at least at the early stage). The safest bets are to find funds or partners in your country, or to find other startups in your country and see who their investors are. See a few more thoughts on raising outside the USA here.
Your target investor list
This is where rubber hits the road and if you’re just skim reading all of this, make sure you read this section. What Distill does for you is narrow down the list of VC funds that could be a fit for you, and then give you a detailed analysis of each. This will save you an untold number of hours. The quick steps are below, but if you'd like a more in depth tutorial, you can find that here.
The steps for this are:
Create an investor search in Distill with the Search tab on the left side.
Start by doing a VC Fund search and add relevant lead VC funds to a list in Distill. It might seem like a lot, but aim for adding 50+ funds to your list as the average rejection rate is high.
Within each VC fund, look through the people that work there. Ideally you'll have an intro path and if not consider adding people to your Distill Team to broaden your reach.
Look at the investing partners that you have intro paths to, click on their Distill profiles and read what their investments are, their Authored Media section (what they are writing about), and if they focus on a specific stage or sector. It could be the person you have the closest connection to, or it can be the most relevant person that you need to find a connection to. Add them to your list!
Run a second investor search in Distill looking for Individual Investors. Select both Angels and People at Investment Funds. Make sure to add keywords to this search as you're going more for interest and experience areas rather than exact round focus. Add anyone that's a fit to your list.
Add other investors and angels to the list that have reached out to you or that you’d like to pitch.
Either export your Distill list to a CSV and paste it into our CRM spreadsheet template. More on if you actually need a CRM here (yes and no).
Ta-daaaa, you are done with the research phase! You now have a list of the most relevant VC funds as well as all the research notes you’ll need to write personalized and compelling outreach. You’ll notice that all the research notes from Distill are included in the export and easily visible in the CRM spreadsheet so you can refer to that info as you write your messages. By putting this all together in Distill, you just saved yourself an incredible amount of work from doing this research manually.
If you run across more relevant investors, or get inbound interest from a demo day, just add those investors to your list in Distill and re-export it. The research questions for the new VC funds and people you’ve added will be automatically filled in.
Once you’ve exported your list, you’ll manage a lot of your fundraise process from the spreadsheet (or whatever your preferred tool is). However, you’ll still be diving into profiles on Distill for meeting prep and additional research as needed.
Now that the research phase is done, let’s talk about your timeline for making your pitches and how you want to structure this.
Have a schedule
For your timeline, I would strongly recommend you smoosh all of your initial pitch meetings into a three week window and not do any first time pitches (AT ALL) outside of the window. For more on why, see the FAQ below. You can have follow up and diligence meetings after that (and almost certainly will) but you should get all first meetings into those three weeks.
If you fail based on your three weeks of pitching, that’s fine and more common than you’d think (more below in the FAQ). As long as you still have runway, you can make some progress and try again in a few months. You won’t look desperate or like you’ve lost momentum if you follow up with people you’ve pitch on what you plans are and then come back to them again later once you’ve made progress.
A large part of sticking to a compact scheduling is prioritizing your investor list and having a plan for which pitches you’d like to do when.
To prioritize, my recommendation is to break out your target investors into three tiers:
Tier 1: your top 10-15 VC funds
Tier 2: the rest of the VC funds
Tier 3: angels, founders, non-lead funds and anyone else
If you go with the three week timeline, I’d recommend scheduling all Tier 3 investors for your first week to use as practice. These investors can’t lead a round for you anyway, so even if they love you, you’ll need to circle back with them once you have a lead. They might also make an intro or two for you, which if you still have time in your schedule can be helpful. Your second week is for Tier 2 VC funds. These meetings are real and you would love to get a term sheet from any of them. Your pitch will continue to evolve this week and hopefully you keep getting better at it. Your third week is your Tier 1 VC funds. This gives these funds the most lead time for scheduling and it also gives you the most time for practicing your pitch. Don’t mess these up.
Getting meetings
To get the meetings you want to get, it’s worth being thoughtful and patient over trying to do a larger volume of outreach. By far the best way to get a meeting with a partner at a VC fund is by getting a warm intro. Cold emailing a specific partner can work, but it should be a last resort.
Use Distill to see if you have any mutual connections with each of the partners. If you just don’t know many people in tech, see the FAQ below. When picking who to ask, keep in mind that some intros are much better than others. Also, to extend your connection reach even further, you should share your Distill list of target investors with any advisors or friendlies to see if they know someone who they can ask for an intro from (more on that here).
After picking out an intro path for investors (FAQ if you don’t have any), you should use the double opt-in method. You can see a thorough summary of the process for this here (from Roy Bahat, Head of Bloomberg Beta). You’ll want to get all of these intro requests out in a short window of time at least two weeks before you start pitching. If a VC is excited about you, they can pretty much always make time two weeks out.
No matter how you try to get in touch with an investor, make sure your email is concise and includes details of why you think they are a fit. For more info about what to put in your email, see our FAQ here. For the meetings themselves, although in person can be nice, doing your pitches over video is fine. For early stage investing, remote pitching has become standard and meeting in person is often not required at all.
As you go through your process, make sure to keep your spreadsheet updated so you don’t drop the ball on anything or miss doing outreach to a promising fund. Having status written down is also important for keeping co-founders and advisors updated. This is a nerve wracking process for everyone involved, even for the people not doing the actual pitching.
Be prepared
Get to know who you’re pitching ahead of showing up for the meeting itself. Although getting to the pitch itself is a lot of work, make sure you don’t drop the ball in the meetings themselves. I see this happen a surprising amount of the time. You only make a first impression once, and especially with investors you won’t get a second chance. Ahead of each pitch, do your homework on the people who will be in the meeting. Showing up prepared is 100% within your control. Investors also make a lot of assumptions about how you might run your company based on how well you pitch (like how good you’ll be at recruiting).
Make sure to read through the Distill profiles of the people you meet with (and their fund profile) ahead of your meeting. These sum up everything we can find online about them, which often includes interesting personal tidbits. Don’t be creepy, but if you have a common interest start off the meeting by making a connection with the investor over it. As you go through your pitch, reference how what your doing parallels their other investments or tie in how an article they wrote is relevant to what you’re doing. You have a lot of pitches to get through, but you only need one lead investor so make each one count.
Closing and next steps
With non-lead investors, even if the meeting goes well you’ll often get a non-committal answer. Remember, they are just for practice and you should follow up with them again after you’ve gotten a lead. With potential lead investors, if a meeting goes well there will be follow up. Usually at least one more meeting will be needed to get to a decision, plus they will have diligence questions. They will also almost certainly ask you how much you are aiming to raise, which is a tricky question. It’s a good idea to have an answer prepared for that and I’ve put some thoughts here on how you might want to respond.
If you get a term sheet (or multiple term sheets) and commit to an investor, closing steps vary depending on if it’s a priced round or a convertible note. At a minimum, you’ll need to go back and talk with other investors to fill the round out. Other VC funds who can lead are often happy to join as long as they can get enough ownership. Once paperwork is all signed, it will still take a few weeks for wire transfers to hit your bank account so keep that in mind.
Finally, if you DO manage to close a round of funding, just remember that this is just the start. Now the actual work begins of hiring your team, building out your product and turning your dream into an actual business. Good luck and you’re doing great!
FAQ
(ie questions founders should ask more often)
How much money is involved in Friends and Family, Pre-Seed and Seed rounds?
It can be tough to pin down exact numbers because the these terms aren’t standardized, and the size of rounds varies over time and by region/industry. That said, here are some rough benchmarks for the U.S. market:
Friends and Family Rounds: These are usually under $500k and might only be $50k or $100k to get the founders started. Typically there is no lead investor and each investor signs a SAFE with a relatively low cap. There almost always a pre-existing relationship and a lot of trust.
Pre-Seed Rounds: Typically range anywhere from $500k to $2M, with many falling in the $500k–$1.5M range. Historically, pre-seed was often under $500k, but over the last few years, as more funds have targeted very early-stage startups, pre-seed rounds have crept higher.
Seed Rounds: More commonly in the $2M to $6M range (sometimes even higher). Seed rounds can look very different depending on the startup’s traction, the founders’ backgrounds, and investor sentiment. Multi-time founders with a successful prior exit will sometimes qualify a $10M raise as a Seed round if it’s the first capital they’ve raised.
What type of diligence do investors do for pre-seed and seed rounds? What should I have prepared ahead of time?
For Pre-Seed, diligence questions will mostly be about your founding team and your idea:
References on you and your co-founders: be prepared to share contact info for people you’ve worked with in the past. Expect that investors will likely do unofficial or backchannel references on you as well.
Market & pricing: this is hopefully covered in your pitch deck, but sometimes an investor will ask more detailed questions about how you view the size of your initial market and how you might go about pricing.
Product or prototype: if you showed screenshots or a video of a prototype, investors will want to see it in action and dig into as much as they can around what you’ve built so far. You won’t need to share your code base or anything that detailed, though.
Customer validation: if you’ve referenced calls with potential customers, you might get more detailed questions about how many conversations you’ve had and what the response to those has been. They might also ask to talk with a design partner if you said you have one or more lined up.
Basic corporate and legal setup: this is very light at this stage and investors will likely just want to confirm you have a Delaware C-Corp in the US or can quickly form one. Investors don’t like investing in an LLC because they have no protections.
Financial projections and use of capital: you shouldn’t need any financial models because they would just be full of made up numbers anyway. The most you’d get here would be asking how many people you’d want to hire at this stage and if you have anyone in mind.
For a Seed round, everything above is fair game as well as a few additional areas:
Product metrics: If you have metrics you’ve shared, expect more questions about that. Investors might as for a cohort analysis or a user ledger so they can run their own analysis on what you have so far.
Detailed cap table and/or prior SAFE notes: if you’ve raised money before, they’ll want to see how much equity you (and employees) own as well as what was in the prior fundraising terms.
Team & paperwork: if you’ve hired employees, they’ll want to see who’s on the team. Although they usually don’t need to talk to them, investors will often check to make sure everyone has signed invention assignment agreements and if you’ve let employees go before that they signed separation agreements.
Financial statements: even if you don’t have revenue, if you’ve been spending money investors will want to see that you have financial statements of some sort. If you have revenue, they’ll want to see how much and what contracts were signed for it.
How much of the round does a lead investor take and what do I do for the rest?
At the Pre-Seed and Seed rounds, a lead typically takes at least half but doesn’t take the full round (this differs at Series A and beyond). The room in the round still available beyond what your lead commits can be used by another fund or angels that you think could be helpful. Either your lead investor can introduce you to other people or funds, or you can choose to include people you’ve already pitched and who indicated they were interested.
How many potential lead VCs should I plan to reach out to?
This number varies a lot depending on how good you are at getting meetings and how well those meetings go. A good rule of thumb is to have 20-30 first meetings with VC funds that could lead your round of funding (it will usually be less first meetings for Series A and later rounds). So if you want to have that many meetings, the question is how good will your response rate be getting those meetings set up. To be safe, I’d recommend adding 2x as many funds to your list, so 40-60 funds. There are over 1,000 pre-seed and seed stage funds, so this shouldn’t be hard. If your response rate is awesome once you start reaching out, then just meet with the funds you think are the most promising. Better to have too many meetings lined up than too few.
Does it matter if a VC firm is Tier 1? Should I only be pitching the best VC funds?
Although there are various VC fund rankings, there’s no agreed upon definition of what the top tier VC funds are. Even if there was, it would vary by fund and also this is very different from the viewpoint of a founder vs the viewpoint of an LP (ie the investors in the VC fund). This is more about fit than about how famous the VC firm is. Of course you need to do your own reference checks on a VC fund (and the partner you would work with) if you get a term sheet, but really you should be trying to find the investor that is the most excited about what you’re doing and in the best position to help you. There are a small number of name brand VCs that are the most famous and although these are absolutely worth pitching, you should think about this like applying to college. Don’t just apply to the Ivy league schools, even if you’re super confident. You’ll want to make sure you include at least a few “safety VCs” on your list just in case. Of course, don’t ever ever tell someone you think about them that way, but it’s important that you don’t just pitch the funds that are in the most demand. Those are the hardest to raise from. Getting a term sheet at all is a huge accomplishment so focus on getting funded and don’t be overconfident only applying to Harvard or Stanford.
Do later stage and larger funds invest in early startups? How would I know if I'm a fit?
Yes, it’s worth pitching later stage funds now if you have time but not with the hope of them investing (see the next FAQ question). However, it’s not wise to expect a later stage investor to actually invest in your early stage round. VC Funds that focus on later stage investing often won’t invest in Pre-Seed or Seed rounds of funding because:
The criteria for early stage investing is totally different from later-stage investing. It’s just not practical for a fund to do the diligence work on an early deal that they would do for a later deal. Many funds will have a separate process for early stage investments, which brings up the second point.
A later stage fund needs to invest their entire fund over a few year period which they can’t do if they are spending time writing small checks. If a later stage or larger fund (think $400m+ in their current fund) doesn’t say they do Pre-Seed or Seed investments, then they probably don’t.
Even if they do say they are open to it, expect that it’s not common for them. If they do an early stage investment, it’s often in situations where there’s a pre-existing relationship with the founder or the partner might be investing their own money vs the fund’s money. So you best chance at being a fit as an early startup for a later stage fund is already knowing them ahead of time.
Is it worth pitching later stage funds for practice?
Yes, absolutely! Although a later stage VC is unlikely to lead your early round of funding (and also, even if they did this carries signaling risk), they can be fantastic for getting real feedback from. They won’t feel awkward about telling you “no”, since it’s understood you are too early for them, and they will hope that you become successful and they can lead a later round of funding for you. This is a great way for you to start a relationship or two with a later stage VC plus get insightful feedback on your business. Give this a try in Distill by updating your search to be for Series A or Series B+ VC funds.
What’s the difference between a startup that’s at the Pre-Seed funding stage and one that’s at the Seed stage?
Venture funding labels (pre-seed, seed, Series A, etc.) aren’t governed by a formal rulebook, so you’ll often see different definitions in the startup world. That said, here’s a high-level way to think about the difference between pre-seed and seed, especially around product development, customer research, and traction:
Stage of Product Development
Pre-Seed: Typically, you may only have a prototype or an MVP (Minimum Viable Product)—or you may still be in the idea stage with little more than a proof of concept. The product may not be fully launched, and if it is, it’s probably still in a very early version.
Seed: The product is usually live (in some form), with the potential to have active users or paying customers. You’ve iterated at least once or twice and have a more stable product than at the pre-seed stage.
Customer Research & Validation
Pre-Seed: You may have done customer interviews, market research, and preliminary validation (e.g., surveys, conversations with potential users), but you might not have hard data from real-world usage yet.
Seed: You typically have more concrete evidence of demand—some early adopters, pilot customers, or at least robust sign-ups. You might have some initial metrics (engagement, retention, or revenue) to demonstrate product-market fit is within sight.
Traction & Funding Amounts
Pre-Seed: Often smaller checks (though “smaller” has become relative—some pre-seed rounds can reach $1M+ these days). You’re raising enough to build out the initial version of the product, assemble a team, and validate the core idea.
Seed: Usually a larger round than pre-seed. By this time, you’re expected to show some tangible results (usage, revenue, or another traction metric). Investors want to see that the product has proven its potential in the hands of real customers/users.
Team & Operational Setup
Pre-Seed: Often 1–3 co-founders, potentially hiring the first engineers or key employees. You might not have an established corporate structure beyond the basics.
Seed: The founding team is often slightly larger and may include a few early employees beyond the core founding team. You’ve likely started to define internal processes more concretely.
How do I know if my startup is at the pre-seed or seed stage?
Have you launched a product that real users/customers are using?
Yes ⇒ More likely “seed.”
No ⇒ More likely “pre-seed.”
Are you seeing measurable traction like revenue, user growth, or engagement?
Yes ⇒ Leaning towards seed.
No ⇒ Probably still in pre-seed territory.
Do you need a larger round to scale what’s already working (as opposed to proving it can work at all)?
Yes ⇒ Suggests seed.
No (you’re still validating the concept) ⇒ Suggests pre-seed.
Ultimately, investors care most about your potential, your team, and how well you’re tackling a meaningful problem—much more than the label “pre-seed” or “seed.” The label really matters primarily for setting expectations around round size, expected traction, and pitch focus.
How do I know what sectors a VC fund focuses on and if my startup is in scope?
Most VC funds that focus on pre-seed and seed rounds of funding tend to be pretty general in their sector focus. It’s not unusual for a VC fund to simply say something like, “we invest in high-growth potential software businesses.” Even if they do have an investment focus that they list on their website, it’s not always clear exactly what that means and if your startup falls within their thesis. If your startup is something standard like a B2B SaaS application, you’ll be in scope for most VC funds. If you’re doing something completely unrelated to software, like CPG, you will be out of scope for most VC funds. Lots of areas can be on the border, such as software enabled services or something with a hardware component. By far the best way to know if a VC fund is worth talking to is to research the other startups they have recently invested in and compare yourself to them. For example, if you are doing something out there like space tech, you’ll want to check to see if an investor has any portfolio companies that deal with something related. Or if you’re targeting a specific vertical like supply chain, you’ll want to see if a VC fund has other portfolio companies that are similar. Using Distill for search let’s you automatically do this analysis and see the readout so you don’t need to research hundreds of other startups to compare yours to.
How can I tell if an investor exclusively invests in the US? Does it matter where I’m based out of?
Some funds are explicit about only investing in US startups, and based on their fund structure they are often required to stick to this. Some funds leave it undefined but if you look at their investment history and it’s 100% US based startups, then that’s likely a restriction for them as well. The unintuitive part about this is that where your startup is based and where you live are two independent things. You might live in London, but if your startup is incorporated in the US then that will be fine with most investors. If you’ve chosen to have your startup incorporated in a country outside the US, then the geography focus of investors starts to matter a lot more. This is especially tricky to research as other startups don’t list anywhere what country they are incorporated in (the vast majority are in the US, though). Even if it's tough to tell where a fund invests, Distill makes it easy to see where their past investments are based (just go through their investments on the fund's Distill page). You can also easily look to see where the partners at the fund are located. If one of the partners lives in Europe, they probably also invest in Europe.
What’s the best way to keep track of status for my meetings? Do I need a CRM?
A dedicated CRM is definitely overkill for this, but you will need a way to stay organized. Founders generally just use a spreadsheet for this. Distill lists are a great way to share your target list with advisors/founders/friends to get their input and you can also track status as well as enter your notes. Or if you'd prefer Google Sheets, see our handy template here that you can export Distill data to directly.
We had a demo day and I got a bunch of VCs asking me to meet! What do I do?
Congrats and that is very exciting! Even if an investor is really pushing you to meet right away, it’s better to stick to your overall timeline and meet with them during your three week window. The reason is that if you pitch them early and they decide to give you a mediocre term sheet, you’ll be pressured to take it before you even know what the response is from your preferred investors. This is a common tactic to get deals for VCs with less of a reputation. Be polite but firm with inbound interest that you would love to pitch them sometime the week of [fill in the date]. They aren’t going to walk away just because you won’t meet with them right now.
Why should I aim for a 3 week window for all of my pitches? Is it OK to go beyond that?
To illustrate why this is my recommendation, let’s consider what often happens if you stretch out your first pitch meetings over a longer (and continuous) timeline. The VC world is small and investors often talk to each other about what they are seeing. If someone you pitch early talks with someone you pitch a month later, they might think you’ve lost momentum or just look desperate. “They just pitched you yesterday? I heard their pitch a month ago. I guess it’s not going so well.” It’s also worth remembering that time you spend pitching is time you aren’t spending on building your business, so it’s better to get this done efficiently.
What happens if I fail at fundraising? Is this a one shot deal with a binary outcome?
At the Pre-Seed and Seed stage, it’s actually quite common to strike out your first time fundraising. So no, it’s definitely not a one shot deal although the outcome is pretty binary each time you try. If you go through the above fundraising process, meet with that many funds and get “No’s” from everyone, then you should take some time to regroup instead of continuing to try with increasingly less relevant VC funds. You’ve already pitched the ones who are the best fit, so it’ll just be downhill from here unless you change something or make some progress. A better strategy if you don’t succeed at first is to pause for a few months and either make progress so you have more compelling data to show or to change your pitch in more meaningful ways. Depending on how you’re feeling and what the feedback was, you might even consider making a more fundamental change to the business you’re looking to build. If you do one of these, then you can try again in 3-6 months and you won’t have lost any credibility. Try pitching the same VCs again if you liked them and if you didn’t have a good fit swap them out others you find through Distill. There are over a thousand pre-seed and seed focused funds so you haven’t exhausted them.
If I can’t get a warm intro, is it worth cold emailing an investor?
As long as you have good evidence that they’re a fit and would be excited about what you’re working on, yes you might as well give it a try. It’s generally much more effective to email a specific partner directly using an email address from Distill rather than emailing a VC fund’s general pitch@ email (if they have one). Many funds I know don’t check inbound decks at all. If you do email a specific partner directly, make sure it’s very personalized and to the point, using all the research and evidence you’ve gathered. If you have a choice between the investor’s work email or personal email, use their work one. Investors live in their work email so they will very likely see and read what you send them. If they respond depends on how busy they are, what you’re working on and the quality of your outreach. Pro-tip: Distill shows you email addresses of anyone under Other Details -> Find Emails at the top of a person's Distill profile.
Who are the best people to ask for intros to VCs from? Does who I ask matter?
Yes, it definitely matters who you ask for an intro from and some intro paths are significantly better than others:
The best intros are from other founders, especially if they have raised money from that investor. Founders are typically the best judge of quality, plus if they take time to make an intro it’s a good signal since they are busy.
An intro from another investor is OK, although if they aren’t investing it tends to bring up questions about why.
Past coworkers, classmates and friends can all be OK depending on the context and are worth asking if you can’t find a founder intro. But if they haven’t worked together before (ie are just social connections), then it won’t count for as much.
By far the least effective intros come from lawyers, accountants and other service providers (although nothing against them personally). Investors assume they are just trying to get brownie points.
Is it worth asking advisors or friends if they know anyone on my target investor list? What’s the best way to ask them?
Yes, in addition to seeing if you have mutual connections in Distill it’s definitely also worth sending your Distill list of target investors to advisors, friends, colleagues, etc to see if they know someone to ask. More on list sharing in the help center here. If you invite them to collaborate with you on the list, they can more easily see who their mutual connections are. Or you can share a public link to your Distill list so that nobody needs to create a Distill account (but can still see all the details on the people and companies).
I don’t really know anyone in tech so I don’t have any mutual connections with investors or a way to get warm intros. What should I do?
If you don’t really know anyone in tech or have any common connections with investors, you might want to consider applying for an incubator or accelerator as they are a great launching pad. You might also want to consider taking time to network with other founders, work at someone else’s startup or go work at a larger tech company just to improve your network.
What should I put in an email to an investor asking to meet them? What makes this message compelling?
You really need to show you’ve done your research and also you need to keep this email short. Investors want to feel special and like they are uniquely a fit for what you are working on. For writing these very personalized messages, the research work and notes that Distill has provided are invaluable. When looking for relevant info on an investor, Distill has already gone through the person and funds social posts, news mentions, articles and investments pulling out what’s most relevant to your startup.
I thought pitching was about my startup idea. Why does it matter so much how I pitch?
Especially at the early stage, often the idea can change or morph over time. You, as the founder, will remain the same so they are make a big bet on you specifically. This is why they base so much of their investment decision on how you pitch and not just the content. If you show up prepared for the meeting, having researched everyone present, they will assume you probably do that ahead of interviews and sales meetings. The same goes for you being personable, charismatic and articulate.
If I get multiple term sheets, how should I decide who to pick? What should matter the most to me?
If you are lucky enough to get multiple term sheets, I highly recommend going with the investors who you get along with best. You can use the offer with the best terms (but from an investor you don’t like as much) to try to negotiate up an offer from the investor you like the most. Just keep in mind that often the best investors expect that you will need to give them a slightly better deal (because they know they’re worth it). You’re getting into a long term relationship for which there’s no easy out so choose wisely. As the saying goes, you can get divorced but you can’t break up with your investors.
