Our first step was to explore Angel Investors. An Angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs. They invest their own money that can come from various sources. It is worth mentioning that in the last 50 years the number of angel investors has greatly increased. Our primary focus area was Ohio state, but we were not limited to this location and considered investors from all over the United States.
The Customer already had a list of a few hundred Angel investors at hand, so we went through it, and checked if they have ever invested in a similar startup and what was the amount of funds invested. As our Customer's startup is an AI-based B2B EdTech Software for Enterprises, we were looking for investors who focused on these categories. The task was far from easy. We had to check investors' profiles on AngelList, LinkedIn and CrunchBase, find what startups they invested in previously and if there was any relation between our Customer's product and their investment preferences. When we came across a good fit, we would try to find out all possible means to get in touch with that investor. In the majority of cases, they provided either personal or corporate contact details. Apart from that, we tried to connect with all of these prospects on LinkedIn. Together with the Customer, we customized the pitch for every single case and personalized our outbound outreach to investors.
A considerable amount of independent research was carried out alongside the list provided by the Customer. We worked with AngelList a lot, as well as with LinkedIn advanced search. In total, we scanned more than 600 individuals and contacted 250 of them regarding the investment opportunity.
The second wave of the research and outreach was focused on Micro VCs. Micro VCs are known for their smaller checks investments compared to regular VCs or investment companies and they typically invest between $25K to $500K. Our main criteria for picking the right Micro VCs for the Customer were:
- the investment focus must be on AI, Educational Technology, B2B SaaS and Enterprise Software;
- should be investing at the seed stage;
- should be US-based company and invest in US startups;
- should be interested in investing in OH-based companies.
There are many lists of Micro VCs available online, so finding them was fairly simple. It was more challenging to do the selection according to the above criteria. We examined each company manually, visited their website and learned their investment thesis. Then, we checked their LinkedIn and Crunchbase profiles and the history of their investments. If the company was a fit for the Customer, we would identify the best points of contact within the company and approach them via email. Once again, a special pitch was developed together with the Customer and each email for every single person was customized. Over 600 of Micro VCs were carefully looked into and 113 were contacted via email and LinkedIn.
The third outreach aimed at the rest of the Venture Capital firms in the United States. The criteria were the same as above, meaning that VCs must invest in startups at the seed stage, must have the investment focus within the scope of criteria characterizing our Customer's product, etc. Our main source of VCs for the third "round" was Crunchbase. During this research campaign, we reviewed up to 1000 companies and singled out 244 of those that met our criteria.