Oodles.com founder Steve Sherlock has set himself the goal of raising a multimillion dollar Series A funding round by the end of January 2010. He is documenting his trials and tribulations and seeking feedback from readers on AnthillOnline.com. This is the second post in his series.
Week 1: Who you gonna call?
There is not much point in having an ‘investor-ready’ business if you can’t find any actual investors.
With that in mind, the first thing I did this week was create a profile of the sort of person/company our business is interested in talking to.
In our case, the ideal partner is either a VC with a track record of investing in businesses similar to ours, or a strategically-aligned industry player (i.e. online travel and media player).
Factoring in the relatively modest level of funding we are seeking also helped narrow down the field, given that the amount we are aiming to raise is just too small for many VCs*.
With these parameters in place, I set about tying to compile a database of potential investors and making first contact.
I went about getting contact details in three ways.
Firstly, I consulted my own database of travel and media industry contacts compiled from years of attending industry conferences and selected those I thought might be interested in taking a stake in Oodles.
Next, I asked my existing network of business associates and friends for their contacts.
I’m lucky enough to have a mentor who has raised in excess of $20 million in venture capital and the majority of it from Silicon Valley. He was kind enough to give me a photocopy of 50 business cards of VCs he’s met. This group has basically given me the US coverage I was after.
I’m also targeting European investors, but unfortunately I (or my friends) don’t have any personal contacts in this area. Instead, I looked at events at which they might congregate and I came up with a funding exhibition, www.getfundedshow.com, which runs each November in London as part of World Travel Market, a major travel trade show I have attended several times over the years.
The funding exhibition involves mostly startups pitching to an audience of investors and travel industry players.
I thought about pitching but decided against it because we are after a fairly specific kind of investor, which means a scattergun approach is of less value. In addition, I’ve had feedback from some investors that they don’t like competing publicly for investment opportunities.
Instead, I’ve booked a ticket to London to attend the event in order to network with the investors taking part.
In preparation for the trip I asked the exhibition organisers for contact details for all the investors attending and all the travel executives. What I received was simply a list of delegate names and their companies.
After scouring through company websites, contacting PAs, tracking blogs and searching through LinkedIn, I ended up with around 45 contact details.
One thing I found useful was to purchase ‘Inmail’ credits via LinkedIn, which allowed me to email an investor directly with a small message introducing myself, telling them I’ll be at the show and requesting their email address so I could send them some information. I used a similar strategy with PAs.
You’d think it would be pretty easy to compose an email alerting a potential investor to an opportunity and inviting a conversation. However, I found it very difficult to strike a balance between composing a message that was short and punchy (so they would read it) but also detailed enough to build interest.
After about 10 rewrites I decided the best approach was to simply introduce Oodles, explain what makes us unique and provide them with a test log-in so they could experience our product themselves by making a booking.
In my next instalment, I’ll let you know how successful my ‘first contact’ was.
*At this stage I am not targeting smaller private investors and angel networks, which means I see no need yet to advertise our investment opportunity more widely.
Steve Sherlock is co-founder of Oodles.com, one of Australia’s leading online car rental aggregators.