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Fundraising sucks. I know it. You know it. Investors know it.

The sooner that founders accept that, the easier it will be. Now, with that being said, there are many things that founders can do to make fundraising easier. One of them is to network with investors before they plan to raise.

My younger sister once told me that you don't want to be looking for a therapist when you need a therapist, and the same goes for funding. The best time to build investor relationships is when you're not actively raising.

Here is everything I learned about why and how founders must build relationships with investors before fundraising.

The Importance of Early Investor Networking

Timing Matters

Think about it. Investors control millions and sometimes billions of dollars. If you control that much money, would you invest it in someone you've known for a handful of weeks or in someone you've known and followed for months or even years?

The better investors know you, the more likely they will take your call when raising capital. These early interactions also help you filter your investor list before active fundraising mode, saving time in the trenches.

Think about pre-raise networking as building warm relationships to avoid cold outreach. There are three big reasons you would want to do that:

• More genuine connections: Conversations without the immediate pressure of a funding decision tend to be more authentic and allow for real relationship building.

• Less pressure on both sides: VCs appreciate calls that don't carry the immediate "Will you write me a check?" tension, and you can be more relaxed without the pressure of closing.

• Better investor understanding of your journey: Investors who have watched your progress over time can evaluate a snapshot and how you handle everything that comes with building a company.

How Early Relationships Lead to Better Outcomes

By establishing these relationships early, you're creating a foundation of trust with investors. You're no longer a stranger with a pitch deck – you're a founder they've been watching and getting to know for months.

This familiarity doesn't just increase your chances of funding; it often leads to better terms and stronger investor advocacy. An investor who feels personally connected to you and your journey is more likely to champion your company to their partners and make valuable introductions to their network.

How to Effectively Build Investor Relationships Before Raising

Identify the Right Investors for Your Space

Before reaching out to investors, create a focused list of about 50 funds that suit your company. Look for funds that match your company based on factors like:

• Their track record with companies in your industry

• Notable GPs or partners who lead the fund

• Value-added services they offer portfolio companies

• Investment thesis alignment with your vision

Once you've identified these funds, narrow them down to 1-2 investors from each you want to connect with. Research their backgrounds, recent investments, and any published content to understand their interests and perspective.

Make Initial Contact

I found a few ways particularly helpful for making connections with investors without actually asking for money:

1. In-person networking at conferences: Events like industry conferences are designed for informal conversations. In Atlanta, for example, Venture Atlanta brings together notable VCs from the Southeast to meet founders. These settings allow you to have multiple brief conversations quickly, usually over free drinks 🤞🏾.

2. Request warm introductions with clear context: Use your network to get introduced, but be explicit that you're not currently fundraising. A simple email template might be:

   "Hi [connection], I hope all is well. I saw on LinkedIn that you're connected to [investor name]. Would you be able to introduce us?

   For context, we aren't actively raising, but looking to do so in the next 6-9 months.

   I really like the work this fund has done in [space], and I'd love to connect with them ahead of our raise."

Stay in Touch Without Being Annoying

If you establish a relationship with an investor in January and plan to start fundraising in July, your job is to stay top of mind with the investor for those 6-7 months without doing too much.

The two best ways to do this are to 1. add her to your monthly investor updates and 2. schedule 1-2 check-in calls to share more detailed notes on your progress.

If you need a template for monthly investor updates (or just more information on what they are), check out some of my previous content:

• Investor Update Template

• How To Write Good Investor Updates

If you go the route of the check-in calls, keep them brief and informal. Aim for 15-20 minutes and try to spend at least 5 minutes just shooting the shit with the investor. Remember that VCs invest in people, and the more they like you, the more likely they will invest.

Practical Tips for Maintaining Investor Relationships

Setting Up a Simple CRM System

The easiest way to guarantee a hard time fundraising is not to have a tracker. I met with over 87 different funds during my raise, and it would've been impossible to manage all those meetings without some CRM.

In my fundraising hub, I've created multiple connected databases - one for tracking funds and another that lets you click into each fund to see all the different investors who work there.

If you're looking for something simpler and free, a Google Sheet works well, too. Just set up a spreadsheet with these key columns:

• Fund name

• Fund website

• Fund stage

• Location

• Average check size

• Investor name(s)

Handling Advice You Don't Plan to Take

You have to be prepared for feedback and suggestions from investors. It is usually well-intentioned, but sometimes investors forget that no one thinks about your business more than you do.

That said, you want to be respectful and show that you at least have an open ear. So when you get feedback (even if you don't plan to take it), try to be as responsive as possible and ask follow-up questions. Show the investor that you're open to being coached.

Holding Back the Good Stuff

While building these relationships, be intentional about what information you share. My early mistake was being too transparent in investor updates before formally raising.

Create different tiers of communication:

• General updates for potential future investors (focus on wins and vision)

• Detailed updates for committed investors (including challenges and sensitive metrics)

This boundary-setting ensures you maintain control of your narrative while building meaningful relationships with potential investors before you're ready to raise.

The Bottom Line

Investors are more than sources of capital – they're partners in your journey who can provide strategic guidance and make valuable introductions. By building relationships early, you transition from approaching them as ATMs to engaging with them as the experienced business partners they are.

If you haven't begun building investor relationships, here's your call to action: Identify 3-5 investors this week who align with your vision and industry. Research their backgrounds, recent investments, and any content they've shared. Then, reach out explicitly to build a relationship, not to raise money.

The best time to start building investor relationships was a year ago – the second-best time is today.

Opportunities For You

Note: I won’t always have these to share, but if/when I do come across an opportunity that is relevant for us Shifters, I’ll share it at the end of each newsletter 🤝🏾

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