Attracting Investors to Close Seed Round of Funding
for AI-based EdTech Startup in the USA

Investments are vital to the growth and success of every startup.
In this case study, we would love to share the approaches we took when reaching out to potential investors and helping our Customer to close the seed round.
3000 investors
22% VCs response rate
Seed round closed
Company Summary
Company Summary
The Customer is an AI-based exam proctoring platform that makes exams incredibly secure and truly scalable.

This EdTech platform allows you to deliver online exams to any place with an internet connection at a lower cost but with higher security when compared to a physical testing center. This helps enterprise, universities and certification providers aggressively grow their exam programs, reach new markets and find new talent.
Task for Prosply
Task for Prosply
The Customer set a challenging goal for us to help them raise their seed round and get a certain number of investors on board. It was a relatively new task for our team, and to achieve impressive results, we had to strengthen our knowledge about the investment process in the US, as well as figure out the best ways of selecting the right kind of venture companies for our Customer.
The Challenge
The Challenge
There is a huge number of investment companies of various types in the US that finance startups at different stages of development. It's extremely important to define what ventures and investment companies may have an interest in businesses similar to yours, or in other words, if your startup is an investment fit for their firm. It is equally crucial to identify if your current development stage (whether it's pre-seed, seed or A, B, C rounds) is the stage a venture capital firm or an independent Angel investor tends to invest in. It took us around 3 months to carry out very detailed market research, review over 3000 investment companies, identify the best matches and reach out to potential investors.
Scope of Work
Scope of Work
Taking into consideration how big and diverse the investment market is, the first step was to create a draft of all possible investment opportunities that meet our Customer's needs and expectations. We decided to have 3 separate stages of the research and outreach: the first one covered independent or Angel investors, the second one was focused on Micro VCs (typically invest between $25K to $500K) and the third one was aimed at traditional Venture capital firms. Each type of investor required a different approach, so let's look deeper into what has been done.
Solution
Solution
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.
Results
Results
We had been working on the investors' task for 4 months. During this time we had researched over 600 Angel Investors, as well as 1600 investment companies, and had reached out to 250 independent investors and 347 VCs (close to 700 personalized emails were sent to Top Executives). The general response rate for such cold email campaigns aiming at offering investment opportunity varies between 4-6%. In the first case, with Angel investors, the response rate was 12%, and when it comes to the campaign for both Micro and regular VCs, the response rate was 22%, 3 times higher than expected. We generated quite a lot of interest among local investment firms, as well as all over the US. The Customer successfully closed the Seed round, found reliable partners to grow their business with and expanded their network of connections. Moreover, we already created a great pool of investors for the next investment rounds!
Plans for the future
Plans for the future
Having raised enough investment to implement all technological and business ideas, the next step would be to focus all efforts on scaling sales outreach to win new customers. Even though EdTech space is very competitive these days and lots of companies that have certifications have already partnered with some major players in the industry, there is still room for new upscale technology that can change the game. That's where we will be heading!
If you are not sure where to start in your search for investors, contact us now.
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