The Dangling Carrot Rule

–> Refrain from sending introductory e-mails to investors that reveal little or nothing about your business…with the hope that the investor will reply with a “can you send some company info?”.

Our VC firm receives dozens of cold business plans a month. “Cold” means we have no prior connection to the entrepreneur and have no prior knowledge of the business. These types of opportunities tend to be of lesser quality, but we approach them all with an open mind.

Implement the dangling carrot if you want to lessen your chances of getting funded.

Dear Investor,

I have spent 3 years and $1M developing this breakthrough technology!!! The market for this product is HUGE, and I am looking for capital to expand my sales and technology team. Would you be interested in funding my company? I look forward to hearing back. My business plan is available upon request.

Regards,

______

Most VCs claim that you must network your way into a VC firm – in other words, find someone who can personally introduce you to a Partner in an investment firm. I find this to be extremely arrogant and do not adhere to this rule. BUT, when approaching a VC in a “cold” manner, be sure you do your homework on the firm, prepare a nice email with a succinct description of your business, and refrain from using the dangling carrot.