Raising Capital - Getting an Introduction to an Investor

You have just identified what looks like the perfect investor.  The problem is that you don’t know him or her and you would benefit from an introduction.

So, how do you get an introduction that will present you best and start a dialogue leading to a relationship leading to an investment?

The introduction should be made by someone that knows you and the investor.  The introduction can come from a mutual friend, a business associate, a professor, a former boss, or other person who is held in some esteem.  The introduction serves as an endorsement of you as an individual.  It places an obligation upon the investor to hear you out and not reject your opportunity out of hand.  Even if the investor does not invest, this may lead to a referral to another investor.

The introduction should be made with knowledge of your investment opportunity.  It isn’t required, but the goal is to place you in the most favorable position.  This calls for an introduction that also includes a favorable statement about your business.  The strongest possible introduction would take the form of a recommendation – even a mandate – to invest.

The introduction can be strengthened if the person making the introduction holds a position with your business.  This may be as an officer, director or advisor.  In this way, the investor is actually making an investment in the person they know.  In effect, you are standing in their shadow while accepting money from the investor. 

A word of caution.  An introduction by a wealthy person that is not matched with an investment by that person is a problem.  The question is raised why the person making the introduction hasn’t made an investment.  Even if unspoken, the question will need to be answered with an acceptable answer.

If the person to make the introduction is not obvious, they may be identified with some research.  A background search on the investor may reveal a common employer, hobby or activity, charity, sports team or other platform for an introduction.  Within this framework, a person may be found who you know who also knows the investor.