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Numerous websites exist to assist founders in their search for the right investors. Even so, no single website or tool is comprehensive, complete, or entirely reliable on its own. Private companies and individual investors are not required to disclose investments, so data is limited to those who have deliberately opted for transparency.
One thing youโll inevitably run into is how poor online data is for classifying what companies actually doโinformation youโll need when youโre trying to find investors who invest in your space. People with pocket protectors call this classification โindustry taxonomy.โ Government agencies use a rigid structure of organizing and labeling business called the North American Industry Classification System (NAICS). But startups and venture capitalists tend to use more informal language when describing their companies, like โB2Bโ (business-to-business) and โmedia.โ
The problem with this kind of linguistic elasticity is that a company selling software to nuclear power plants and a company selling CRM software can both be classified as B2B. Terms like โenterprise softwareโ are used in different ways by different people.
Given the ambiguity, you would be wise to look skeptically at industry classifications of startups and investorsโ areas of investment.
Each of these resources has strengths and weaknesses. Most overlap in some areas, but itโs helpful to get familiar with each one. No matter where youโre looking, there are a few standard research questions and tasks you can focus on:
Who has invested in companies in your industry?
Lists of investors sorted by industry.
Looking up companies you know for lists of their investors.
Once youโve found investors who have invested in companies in your industry, look up their portfoliosโon AngelList, Crunchbase, or their website if they have oneโto see what other companies theyโve invested in; then look at those companiesโ investor lists for investors you havenโt heard of.
Googling for โtop [stage] investors in [industry].โ
AngelList. AngelList started as a list of angel investors, but itโs much more than that today. In addition to listing investors, AngelList also offers a startup job board, and enables startups to indicate when theyโre raising money. Founders can even complete an entire fundraising transaction with an investor online using AngelList. Some features on AngelList are paid, like their job board, but to access the other features youโll just need to create a free account.
Crunchbase. One of the best free tools for researching investorsโ portfolios of investments. They offer a searchable list with filters that costs a few hundred dollars a year. Crunchbase is great for looking up who has invested in companies you know or admire or that are similar in some way to yours.
Investor websites and blogs. Donโt forget about general searches to find investor portfolio pages, About pages, and blogs from the firm or the firmโs founders or partners.
Nfx Signal. Nfx is particularly helpful for the second research task listed above, creating lists of investors by industry.
Linkedin. Investors often list board seats and may have robust Linkedin profiles with real information about how they invest.
Shai Goldman. A startup and venture community leader in New York City, Goldman keeps a running list in Google Sheets of venture capital funds below the $200M threshold. Itโs a great resource for discovering relatively new funds you may not have heard about yet.
Twitter lists. Some individuals and companies have created lists of notable investors who are active on Twitter. We recommend Robert Scobleโs โInvestors/VC/Angelโ and Upside.fmโs list of VCs.
โTop investorโ lists. Each year, several different companies publish lists of the โtop investors.โ Two that are updated annually are Forbesโ โThe Midas Listโ and CB Insightsโ โ100 Top Venture Capitalists List.โ Additionally, lists like the โVC 100,โ based on data from 2014, from Entrepreneur.com and PitchBook can help you wrap your head around some of the major players in the industry. Here are a few more:
โThe United States of Venture Capital: The Most Active VC In Each Stateโ
โThe Top 10 VC Firms, According to InvestorRankโ (2011)
โcautionโ Take these lists with a grain of salt. While many profess to be based on data, their methodologies are always opaque, and industry insiders see them more as PR stunts to get clicks than canonical lists that represent true fund performance.
CB Insights. This resource costs between $4K and $20K a month.* But their primary customer is not founders who are looking to raise venture capital. Their customers are investors and companies who are looking for data on industry trends and harder-to-get data on companies they may be looking to invest in or buy.
PitchBook. PitchBook provides similar data to CB Insights and does not share their pricing publicly. It is rumored to be several thousand dollars a month.* That said, many who have used it or gotten access rave about how helpful it can be. If you can find a friend who has a login, buy them a cup of coffee and check out PitchBook to see if it might be worth the cost for you. They include data like fund size, dry powder (the amount of money in a fund that is uninvested), and what other companies in your space an investor has invested in.
โcontributeโ We plan to add more tools to this sectionโif you have any suggestions please let us know.
Firms like Kapor Capital and Backstage Capital focus their funding on underrepresented founders, and there are many more. Online resources exist to help connect founders to investors who work specifically with underrepresented teams:
The Founders for Change Diverse Investors List currently contains information on fund size, sector, stage, and diversity of 400 investment firms.
PitchBook offers a list of VC firms that invest in companies founded by women.
Crunchbase keeps a list of VC firms investing in companies led by women and minorities.
The Binders Project introduces women founders to investors.
In 2015, The Information started tracking diversity and information on diverse founders in the top 71 VC firms. They summarized the 2015 data and keep the โFuture Listโ in a consistently updated Google Sheet. If your company is interested in seeking investment from diverse firms, or learning why you might want to, these resources can be very helpful.
โcontributeโ Please help! We welcome suggestions from readers of great resources to add to this section.
Youโre going to have to collect a significant amount of data on at least 50 people at the top of the funnel. If youโre collecting 5โ10 data points per person, thatโs 250โ500 data points you need to keep track of. A paper record is not your best option for storing all of these data; thatโs a lot to risk spilling coffee on. This is where the tools of relationship management can be really helpful.
Most CRM software is built for big organizations to help teams collaborate on deals or communicate sales numbers. The dominant CRM company, Salesforce, employs 30K people to build and sell its software.
For founders sourcing investors for an early-stage company, a tool like Salesforce would be overkill. To run a good fundraising process with relationship management, there are hundreds of possible tools you can use, and many are flexibleโitโs just important that you have one. Whichever tool you use, youโll want to add a column for โstage,โ which should refer to your funnel. We recommend keeping your stages simple, like โgetting introduced,โ โholding meetings,โ โnegotiations,โ and โdeal wonโ or โdeal lost.โ If you have more stages than that, youโre likely to end up not using them because of how tedious it is to update the records all the time.