It’s always exciting for a startup to announce a new funding round. What a great opportunity to attract new customers, reinvigorate old customers (“I told you we’re here to stay!”), get on potential recruits’ radars, and generally establish credibility in the eyes of future stakeholders.
However, in addition to the flood of energizing emails and phone calls, you’re also putting yourself on a billboard for other companies to sell their services to you (“hey, here’s exactly how much fresh capital we have to spend!”).
We announced a $5M funding round on Wednesday, July 22nd and the cold emails came fast and furious. In total, I’d estimate that I received about 60 cold emails and 10 cold phone calls.
Here’s a quick look at the timing and type of 45 cold emails I kept and categorized:
They mostly came the day after our announcement:
and were heavily weighted towards recruiting and sales:
A few important notes to accompany this rudimentary analysis:
- This excludes overly spammy emails that I sent straight to my spam folder.
- This excludes emails sent to my co-founders.
- This excludes phone calls.
- This excludes any “warm” emails, meaning introductions or follow-ups on older email conversations.
How many of these emails did I feel compelled to respond to?
First of all, the $5M hit our bank account over a month ago. Companies don’t announce on the day they receive capital. They bolster their product and line up press connections first.
Second, in anticipation of that funding coming in, we had already been procuring services. We moved into our new office a month before the announcement; we started working with a recruiter two weeks before the announcement; we’ve had a 409A firm for almost a year.
On the day of our announcement, we had no incremental desire to procure services. In fact, because we’re so busy with customers and potential customers, it’s probably the worst day of the year to try and sell us something.
With this realization, I started replying to a handful of cold-emails, with this message:
The purpose of my email and this blog post wasn’t / isn’t to make fun of these cold emails, but rather to highlight how ineffective the timing of their outreach was.
At DataFox we’ve been building a data-science-powered solution to deliver lead intelligence to sales and research professionals, so I know there’s a better way.
The ideal sales trigger isn’t a noisy funding round, but rather the leading indicators of that funding round: office expansion, key hires, product launches, partnerships, conference sponsorships etc.
Imagine the relative advantage of the one real estate broker, recruiter, or software vendor who reaches out to me with a personalized email 6 weeks before the other 59 sales reps do!Why doesn’t everyone do this? Because it’s hard. Even best-in-class technology companies like Marketo and LinkedIn sent me cold emails in the days following our funding announcement. Technology research firms like IDC, Gartner and Forrester — their job is to discover emerging companies — they reached out to me the same week.
It’s not humanly possible to track and digest the thousands of sources and millions of pieces of content that you’d need to, in order to consistently discover growing companies.
Besides using a solution like DataFox, or an advanced matrix of Google Alerts, here are a few suggestions for how to sell to a company like DataFox:
- If you can’t reach out earlier, reach out later, when the company isn’t in the busiest week of the year
- It’s always better to get a warm introduction, or at least mention a common connection to the company
- Use uniform fonts in your email, so it isn’t obvious that you pasted a template paragraph into the email
- Double-check your content! Someone send me an email congratulating me on “raising $18.7MM in financing”… wrong company!
- Make sure your CRM is set up to block emails going out from multiple reps
Answering the “Why You, Why You Now” question is central to a successful sales process. Often a funding event is a signal that a company is doing well and has capital to spend. But many reps underestimate the ineffectiveness of reaching out to a company that week, when everyone else is too. My suggestion: look for leading indicators of growth to reach out to a company with originality of message and timing!
At DataFox we’re ushering in the era of lead intelligence. Try DataFox free at www.datafox.co.