Congratulations, you’re an entrepreneur.
You’ve fulfilled a lifelong dream and stepped into a void in the market that you’re ready to fill. There’s just one problem.
You need money.
You can go the traditional route and shake a lot of hands, but luckily, there are tools out there that you can use to raise money, separate from traditional VCs or angels.
Ajay Yadav is the Founder of Roomi, a roommate-finding app that has raised more than $1 million using AngelList. While you may be familiar with AngelList, you might not be getting as much out of it as you could.
We recently interviewed Ajay, and he explained how to use AngelList to raise money from dozens of investors with a few steps and some simple A/B testing.
Start with these two steps.
1) Have a Profile
Create a profile on the site and make sure it follows certain rules provided by AngelList. Make sure you fill out plenty of information—in particular, be sure to display your team and your product. If you have a video, put that up, too.
2) Actively Reach Out to Very Targeted Investors
On AngelList, you can find information, but you can also find investors focused on real estate, or B2B, and so on. You can see how many companies they’ve invested in and target them directly.
The way it usually works is you follow them and they follow you back, a la Twitter or Instagram. There’s a limit, but if you follow enough people every day using an account for you and your team, you’ll get a substantial amount of people following you back. Once they do, that opens up a messaging platform that you can utilize.
A/B Testing: The Magic Words of Fundraising
This strategy isn’t exactly novel. A lot of people do it; they just don’t all do it right.
The greatest examples are companies who don’t take advantage of A/B testing. Early on, when the Roomi team was working on AngelList and had no presence, Ajay used to test different types of emails (one long, one shorter, one extremely short) and research the investors.
If you know they invested in a company, try to use that information when you reach out. Relate to them; if the company they invested in is awesome, let them know. Anything you can find out about the person, put it into your email.
Sometimes short emails work well; sometimes longer is better. You have to test a lot of emails until you find what works with your targeted investors.
Of course, if they don’t follow you back you can probably find them on LinkedIn. Usually they will link over to their LinkedIn profiles from AngelList. No reason not to use that information to reach out.
Then, as Ajay says, “harass them” until they answer—except, don’t really harass them… That’s just rude.
Two Ways to Distinguish Your Company’s Profile
1) Flaunt your team
When investors look at someone’s AngelList profile, the team stands out most. These investors want to know who your people are.
Early on, Roomi hired someone to take really good headshots; companies don’t always consider this as much as they should. The Roomi headshots look consistent and nice, and every team member has a short bio.
It’s all about selling, too, so make your bio content pop.
2) Have as much information as you can about your company—but break it down into bullet points
After A/B testing, the Roomi team learned that people had more interest in their profile when they had bullet points. Investors don’t have time to wade through long paragraphs, but you can put the same information in clean bullets and garner wildly higher interest.
It gives a quick high-level view, just enough to make them really excited.
Check out Roomi’s profile on AngelList to see a great example of what we’re talking about.
How Does the “Courting” Process Look?
The next step after interest is a phone call. That’s how you’ll share your passion and move the relationship with an investor along.
It may be a good idea not to share your pitch deck right away on your profile. What worked really well for Ajay was writing, “Available on request—please don’t hesitate to ask.” It brings you attention and draws interest—as long as the rest of your profile is filled out.
Did We Mention You Should Be A/B Testing?
A/B testing is hugely important.
If you only have one approach when reaching out to a prospect or potential investor, and you don’t get a response, you might think they just wouldn’t be a good fit. But sending two different messages allows you to test response rates and see if something clicks.
Roomi does this type of testing every single day in communication with customers and investors. They’ve been doing it it from the beginning.
70% of their customers are organic. Ajay went over to the app store, A/B tested a lot of titles and images on it, and soon Roomi became the #1 app for the keyword “roommate finder.”
As you’re searching for investors to fuel your dream, get creative.
As you’re searching for investors to fuel your dream, get creative.On AngelList, the amount varies from investor to investor, but most will invest between $1,000-10,000. Pile up enough of those, and you’ll be well on your way to what all entrepreneurs want and need—resources.
If you don’t use iTunes, you can listen to every episode here.