I usually tell founders that cold emails to prospective investors aren’t all that effective. But they can work provided you do extensive research and find the right fit.
A lot of founders skip the research phase, though.
Michael Bamberger is not that kind of founder.
“I’ve done a lot of cold email in my career,” says Bamberger, a serial entrepreneur whose ventures have focused mostly on the intersection of data and research. “I’ve learned a lot about what works and doesn’t work. I built my last business on cold email, basically.”
That’s why he was confident about cold outreach when he was looking for investors for his company Tetra Insights, which builds software for user experience teams.
Tetra has raised $7 million to date, beginning with $500,000 from friends and family in 2019 and a $1.5 million seed round in 2020. Michael and his co-founder Panos Rigopoulos raised a $5 million Series A that closed in September 2021, where cold emails played a pivotal role.
“When I changed my criteria to finding people who were a fit, the process was really quick.” Michael Bamberger, co-founder and CEO, Tetra Insights
Raising capital in unprecedented times
Because Michael had launched two other startups before Tetra Insights, he knew he had to validate its core offering before seeking outside capital. He invested his own money to hire Tetra’s first engineer, who built the company’s MVP. That way, when he approached friends and family to raise funds, he had a version of a product to demonstrate.
After raising the $500,000 from his inner circle, he could begin a formal seed round. By the beginning of 2020, he knew he was on to something. “We had paying customers. We had users growing their engagement and really positive feedback,” he says.
But when the COVID-19 pandemic hit, Michael worried that his R&D-focused product would be a hard sell in the tough economy. He stopped thinking about fundraising and instead focused on repositioning Tetra. However, he soon realized that pausing his search for investors was “completely wrong.” Instead, he took a new approach to fundraising: cold emails.
Michael had a strong network in the startup and venture capital community, but the investors he met often took meetings as a favor to mutual friends, not because they were actually interested in the UX research space. Meeting investors via warm intros wasn’t “working fast enough,” he explains. So he changed strategy, implementing a three-step process that allowed him to identify investors that would be interested in his startup.
His advice for cold calling?