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Since we’ve pre-released ChubbyBrain’s Funding Recommendation Engine to a little over 1100+ entrepreneurs (take a look at the startup demographics of this impressive group), we’ve been gratified by the very favorable response and tremendous feedback from not just entrepreneurs but by investors (angels, VCs, accelerators). Our algorithm and usability has improved with your suggestions (entrepreneurs) and with your data (investors).
With the emergence of the Funding Recommendation Engine, we’ve also seen a rise in what can only be called business plan spam. Given our focus on helping entrepreneurs identify investors, we really really want every startup to succeed. We are a startup ourselves and know the challenges and what it is to “live the dream” and at times, “the nightmare”.
But we want to offer one piece of advice to those folks mass mailing their business plans to us and a larger list of investors.
Stop sending your business plan this way.
Nobody has ever received funding using this strategy. Ever.
Business plan spam is a spray and pray strategy which seems to follow this pattern. Startup entrepreneur:
- Buys a list of investor email addresses or manually creates a list of investor email addresses.
- Puts an email together which generally is comprised of the following:
- the words game-changing, world-changing, innovative, paradigm-shifting
- a multi billion market opportunity
- a request for funding (not a request for a meeting mind you)
- a claim that the investor needs to get in on the ground floor or early or they will miss out
- many exclamation points
- Sends this email to a list of investors (and folks who may have access to investors which is I guess why we are on the list). The emails we receive are generally not even personalized (at least mail merge folks?) and often the list is not bcc’d so you can see everyone on the list.
Your idea may ultimately be a game-changer and really be amazing and worthy of multiple exclamation points, but this strategy does a disservice to you and your business as no serious investor (or legitimate person/entity involved in the entrepreneurial economy will take it seriously). In fact, the only persons who are likely to respond to these emails are those that smell desperation and see an opportunity to take advantage of you as a result. There are as Chris Dixon of Founder Collective and Hunch articulated lots of extractors out there who’d rather take value than build value. And your mass emails will attract these parasites.
There are great startup resources out there which are focused on helping you build. We hope to be one of those. But even if what we have is not for you, please find another credible path and source to investors. Business plan spam is definitely not the way. Guaranteed.
And one last thing – besides not sending these emails, do not buy lists of angel investors or venture capital investor email addresses. Most have outdated data, may be chock full of service providers and are not targeted (do you really want to pitch your green tech idea to a healthcare venture capitalist?). In general, finding their email addresses is one of the easiest things one can do. So save your money for your product or for someone on your team who has gone the extra mile. The hard part is finding out who the right investors might be, understanding them to make your pitch resonate and ultimately getting in front of these folks and bought into your idea/dream. Good luck in the hunt!
If you are looking for funding, we hope you’ll try our free Funding Recommendation Engine. In the meantime, you may want to check out our educational guides on venture capital, angel investment and investor reverse due diligence.