Cold Emailing Investors

Reaching out to investors can be a daunting process for searchers and independent sponsors. Investors who are active in the space are bombarded with multiple pitches daily, and their time is extremely limited. Your email must be concise, compelling, and data-driven to stand out and secure a meeting. Below are some best practices for converting your cold email into an investor meeting.

Use a Clear Subject Line

Your subject line should be specific and make clear to the recipient whether your deal fits in their "buy box." Instead of "Investment Opportunity," consider “Investment Opportunity: $2.5M EBITDA Residential Roofer w/ 20%+ Margins.” Give the investor a reason to open the email besides the fact that it's sitting in their inbox.

Include Key Quantitative Highlights

Searchers and independent sponsors consistently reach out to investors with vague explanations of the deals they are working on. There seems to be a view by some that if you can just get an investor to take your call, you will be able to convince them of the merits of your deal. But an investor is unlikely to set up a time to meet with you if you haven't given them a good reason to.

Investors are drawn to numbers. Instead of vague descriptions like “a fast-growing company with blue-chip customers,” provide specific data. For example:

- Revenue: Highlight annual revenue, growth rates, or trends.

- EBITDA: Mention profitability and margins.

- Transaction Size: Specify the deal size and capital required.

- Deal Multiple: It's amazing how many cold emails don't include this critical data point.

- Market Opportunity: Use quantitative evidence to demonstrate the attractiveness of the market.

Be Concise

Investors have limited time, and every time you reach out, you should assume they’ve been contacted multiple times that day. Even if that's not the case, it's a good way to guide your thought process when strategizing an initial outreach. Keep your email brief and use a clear structure:

1. Introduction: Briefly introduce yourself and your background.

2. Key Deal Highlights: Present the most critical metrics upfront in addition to a qualitative description of the business.

3. Call to Action: End with a direct request to set up a call or an offer to send over a full deck on signing an NDA.

Tailor Your Message to the Investor

Personalization goes a long way when possible. Demonstrate that you’ve done your homework by mentioning why you believe the opportunity aligns with their investment focus.

Final Thoughts

By including quantitative highlights, keeping your message concise, and personalization, you can significantly increase your chances of setting up meetings with the types of investors who will be interested in your deal.

A vague email requesting to "hop on a call" to learn more will unlikely lead to much traction. Remember, your goal is to pique an investor's interest and get them excited to spend 30 minutes of their time with you.

About Main Street Capital Network

Main Street Capital Network is a syndicate of 160+ SMB investors—individuals, family offices, and funds.

If you are raising equity for an acquisition or expect to do so in the future, don't hesitate to contact us here (see our investment criteria). We like to connect with searchers/sponsors at any stage (currently searching, preparing an LOI, or under LOI).

If you're an accredited investor interested in investing in search and independent sponsor deals with us, please complete this short investor form.