Create a Target Investor List to Quickly Raise Smart Money

Do you feel like some of your investor meetings are a waste of your time? Are you pitching investors that don’t really understand your business?

If so, you are probably using the shotgun approach to fundraising, which is one of the reasons that 85% of startups run out of cash.

Successful entrepreneurs know that the fundraising process is a marketing campaign just like any other. Build a target list, qualify that list and get warm introductions. It’s a heck of a lot better than just entering pitch-fest competitions and networking like crazy without any roadmap or plan of attack.

Successful entrepreneurs save valuable time by FOCUSING their fundraising efforts on those investors that; a) understand their business, b) have investable cash today, and c) have a good reason to write a check to you quickly.

I describe how to find the right investors in the SmartMoney Playbook. It’s free, and you can grab it here.

Who is the wrong investor? It’s someone who brings money to your deal, but only money. It’s the opposite of a SmartMoney investor.

SmartMoney investors are those with deep knowledge of and connections in your industry. Simply stated, they can help catapult your business to stardom almost overnight. are those with deep knowledge of and connections in your industry. Simply stated, they can help catapult your business to stardom almost overnight.

Your first priority on the path to accelerating funding for your startup is to create a target investor list of these SmartMoney investors…those who have already invested in your space and achieved a lucrative exit.

Here, watch as I walk you through why this is so important:

How to create a target investor list

The first and most critical step in finding SmartMoney investors is to compile a target investor list. There are five steps to creating your SmartMoney Target Investor List:

1. Identify three or more vertical industries for your business
2. List potential buyers on a Market Map
3. Identify key market players in your vertical industries. List companies who have achieved successful exits or have already raised money from Tier 1 investors, along with all competitors of yours.
4. Identify the venture capital investors in those deals
5. Identify the angel investors in those deals

There are several tools available to use, including:

• Crunchbase (free-$50)
• VentureDeal ($25/month)
• CB Insights Venture Capital Database ($1,600/month and up)
• Angel List (free)

Keep in mind that those tools are simply that; tools. Just as some homeowners love DIY and use tools to do it themselves, many others recognize they’ll get better and faster results by hiring experts. My firm offers a service to create this target investor list for entrepreneurs, and we also teach entrepreneurs how to build their own list.

Regardless of how you go about it, it’s critical that, as CEO, you spend your time intelligently. Don’t waste it with a spray and pray approach to fundraising. Rather, make an investment in creating a highly-targeted list of investors who will already understand the value of your business the minute you walk in the door.

Once you have the target investor list created, devote your energy to booking meetings with investors who bring more than just cash to the table.