How To Capture The Attention of an Investor with Sara Mohajerani

How do you, as a founder, capture the attention of an investor? We sat down with Sara Mohajerani (SM) from Bluesky Equities to chat about all the different ways she gets approached and the different ways you can nail the introductions and conversations. 

TNT: Hey Sara! Thanks so much for sitting down with me to talk. Let’s kick this off by talking about cold direct messages or cold calls and emails. How many do you get in a week, and how do you deal with them? 

SM: I typically will get 5-6 cold emails a week, and that’s steadily increasing as Bluesky Equities grows. I will always take a look at the emails and the decks, and if I like the deck and the industry, I’ll do a quick call with the founder. BUT, to be honest, most of the time, the conversion rate is really really low. The majority of our deal flow comes from our network, through warm introductions. 

 TNT: Why do you think cold calling or cold DM’s through LinkedIn have such a low conversion rate? 

SM: With the current capital market, most investors and most of the people who work in VC have their qualification process. A cold DM is hard because it hasn’t gone through their qualification process and you don’t have a trusted source that it came from. 

TNT: So in your opinion, it’s all about the warm introduction. 

SM: Warm introductions 100% have a higher conversion rate. If it’s coming from a fellow investor/VC firm, it’s because you know that whomever introduces you to the startup, they’ve already done their due diligence BEFORE it even gets to you. Investors will often trust their business partners and networks as they assume people in their network are familiar with their investment criteria and send them the relevant deals that fit.

And if it’s from another entrepreneur or founder, it can still work because the founders know each other well, trust each other, and know the product. If they’re in the same industry, those founders understand the industry, know the positive values of the industry, and what could work and succeed in that industry. It’s a positive association. 

TNT: That’s a great point about founder introductions and their positive associations within the industry. But what should you do if you don’t have a warm intro? 

SM: You definitely CAN send a cold email - you just need to make sure it’s a good one. You need to learn and practice and hone the email, and make sure it’s personalized to the person you’re writing to. Don’t mass email the entire firm. Make it personalized, make it one-to-one - the more time you put into it, the more chance you’ll get with a personal response 

And another way to approach investors, without the warm intro, is to do it via the startup community. Get engaged! Go to events, meet other founders, and put yourself out there. 

TNT: Which we now can do again, which is awesome! And when you’re making these connections and meeting investors, should you try to connect by asking for advice or mentorship instead of funds? 

SM: Not necessarily. As a founder, you need to make clear what you’re looking for from that person or firm. For example, at Bluesky, we don’t interfere with any operational or strategic paths. We’d be happy to provide some advice on the deck and financial mechanism, but we are an investor and we strictly look at pitch decks, so it wouldn’t work for you to ask us for mentorship on the operations or sales. And you should be careful what you ask for, mentorship vs funds. Not everyone is able to give time AND money. 

TNT: A very good point. Sometimes time capital is more scarce than money capital. 

Alright, let’s talk about mistakes. What do you think are the worst mistakes people make in fundraising? 

SM: Hands down, it’s not being prepared. You have one shot to impress the investors and whomever is working on that deal. Have the slides ready, and know how to talk about your company at the best level - don’t waste your first impression! 

And make your pitch flow well - what’s the problem, how is your product or service the solution, how are you going to monetize it, and all the numbers. Sometimes founders fall in love with the problem and the tech, and they don’t talk about how to monetize the product, and that’s a big no-no. 

Also make sure that you’re answering the questions from investors clearly and directly. Don’t postpone answering indefinitely. Make sure your answers are timely, and if you don’t have the answer, go and do the research and get back to the investors quickly… in less than 24 hours after the call. 

Lastly, make sure you practice, practice, practice. It’s always apparent if the founder/person pitching hasn’t practiced.  

TNT: Are there any other red flags for you? 

SM: If the founders can’t speak about their company in plain language, and get too caught up in the technical language. Or if they say they have no competitors. Or if they’re not actively engaged, like if they’re waiting on the investors to make the first move. Founders  should take the lead, reply to the introduction, try and set up the call, and do it within 24 hours. If their communication is bad with me/other investors - is that indicative of how they communicate with your customers?

TNT: Oh yes, poor communication is such a huge red flag! 

Ok, so what do you do when you, as a founder, have captured the attention of the investor? 

SM: Once you’ve had the call or the meeting, after a couple of days, follow up with a nice email. Try and set up a follow-up call or meeting, and if they’re asking questions, make sure you’re getting back to them in a timely fashion. It’s key that you give the investors what they’re asking for - details on the company, your data room, financials, etc. If they’re asking questions or asking for items, it’s a really good sign. That means that they’ve started a due diligence process and are looking at you more seriously. 

TNT: Great point. Last question! What do you think makes a good founder and investor relationship? 

SM: I think a good relationship is marked by investors helping founders tap into their network, either from a fundraising or customer perspective. You want to be able to mutually introduce each other to other angels, portfolio companies, VCs, etc. 

TNT: Love it. This has been such an enlightening conversation, Sara! Thank you so much. 

SM: Thanks for having me! 

*Sara Mohajerani joined the team at Bluesky Equities in 2017. Sara manages the portfolio of tech-based startups which currently holds 85+ positions at Bluesky. She actively engages with financial and operational analyses of the portfolio companies, understands the metrics, consolidates KPIs across the portfolio, and provides a concise up-to-date status report to the executive team at Bluesky. She tracks the potential investment pipeline, meets the founders, conducts financial, market, and company diligence, and evaluates investment opportunities.

Sara is involved in promoting entrepreneurship and supporting the Alberta startup community. She actively engages with different angel groups such as Startup TNT, Women at the Cap Table, Valhalla Private Capital, and NACO.

Sara holds a Master of Science in Chemical Engineering and a Master of Science in Engineering Management, from the University of Alberta.