Key points
- Be ready before the first approach; first impressions are not repeatable
- Target on mandate fit, not brand name
- Reach the person who can take it to committee
- Keep the first message short and specific
Approaching an institutional investor is not like a sales campaign, where volume compensates for conversion. Each investor is a finite opportunity: decline once and the second approach starts at a disadvantage. The approach therefore deserves the same discipline as the materials.
1. Be ready first
Do not approach an investor until the deck, model and core data room can withstand scrutiny. If you are unsure, test them: see how to make a project investor ready.
2. Build the list on mandate fit
Choose investors whose current mandate fits on sector, stage, geography, ticket size, capital type and return. Evidence of recent deployment is a better guide than a website. Record why each investor is on the list. Eight to fifteen well chosen names is usually better than eighty.
3. Find the right person
A general enquiries inbox is the slowest route in. Identify the partner, director or investment manager responsible for your sector and geography. The best route is an introduction from someone they know and trust: a co investor, adviser, portfolio company or a specialist introducer.
4. Make the first message short
A few sentences: what the opportunity is, the sector, stage and geography, the capital sought, why it fits their mandate specifically, and a teaser attached or available. No full deck, no model, no superlatives. See how much information to send an investor.
5. Sequence the approaches
Approach investors in a controlled sequence so that feedback from early conversations can sharpen later ones. Avoid contacting several people at the same firm independently.
6. Follow up with substance
A single follow up after a reasonable interval is normal. Each subsequent contact should carry new information: a consent granted, a contract signed, a milestone reached.
7. Treat every decline as information
Ask, briefly and politely, whether the decline was about fit, timing or substance. Not all investors will answer; those who do are giving you something valuable.
Mistakes that close doors
- Mass emails with a deck attached
- Approaching before consents, grid or key contracts are evidenced
- Overstating the stage, the revenue or the level of interest from other investors
- Approaching investors whose mandate obviously does not fit
- Missing the basics: the amount, the instrument and the use of funds
BriHel makes mandate matched introductions to named decision makers, for opportunities that are ready. If yours is not yet, the Investor Readiness Review comes first.
Before you approach the market. The Investor Readiness Review tells you what an investor will conclude from your materials, and what to fix first. £995 plus VAT.
This article is general information, not investment, legal, tax or financial advice. BriHel Capital introduces only and does not arrange transactions, provide advice, or carry out regulated activities.