How To Raise Startup Funding: Leverage Your Professional Network with CRM Software

"A strong network is the ultimate shortcut to everything you want to achieve." – Melitta Campbell, renowned Business Coach and Author. Raising capital can be a daunting process, especially for early stage startups. By unlocking the power of professional networks with CRM tools, startups can gain a competitive advantage with fundraising and close a bigger investment round. This article provides actionable tips on how to leverage your professional network at every step of the startup fundraising process, and shortlists top CRM software examples for fundraising.

4 Steps in Raising Capital for Startups

Fundraising is the process of raising capital from investors to finance a company’s growth and operations. Raising capital for startups typically spans 3-9 months and involves extensive preparation such as creating a pitch deck, cap table, data room, and essential legal documents such as the Founders’ Agreement. Once the groundwork is laid, there are 4 steps in the startup fundraising process:

Investor prospecting and outreach: in this initial phase, startups shortlist relevant investors within or outside their professional networks. Tip: double check that the shortlisted investors focus on your industry and region, and do not have competing portfolio companies. For each investor, startups need to identify the best way to get in touch, which can be via cold emails, warm introductions, or in-person meetings at tech conferences. Read more about how to arrange warm introductions and write successful cold emails in our Top Networking Tips and Tools article.

Introductory call: after getting in touch and sparking the interest of investors, the next step is to jump on an introductory call. Here, startups get one shot to pitch their vision, learn more about the venture capital firm, and ask questions; for example, how does the investor support or add value to their portfolio companies?

Deep dive: if there is mutual interest, investors undertake a thorough evaluation of the startup including the business model, target customer, industry trends, product-market fit, and traction. This stage involves sharing information through emails and follow-up calls, which is used to create an investment memo by the venture capital fund. The level of detail requested by each investor varies; for instance, venture capital funds generally delve deeper compared to business angels. During this fundraising phase, it is crucial for startups to be transparent and promptly address investor queries.

Investment committee and term sheet: in this final step, a venture capital fund arranges an investment committee to make the final decision on the investment opportunity. If approved, a term sheet is issued, which outlines the investment terms upon which the investor is willing to invest in the startup. The startup can accept or choose to negotiate different terms. Once both parties agree on the term sheet and sign it, legal and financial due diligence is conducted by the venture capital fund itself or by an external consultancy. In contrast, angel investors make decisions on their own without an investment committee.

How Professional Networks Accelerate Startup Fundraising

Professional networking can truly be a game-changer in the fundraising process. Melanie Perkins, the CEO and co-founder of Canva, a graphic design platform valued at $40B in 2021, serves as an excellent example of how professional networking plays a pivotal role in startup fundraising. After repeated rejections from 100+ investors, she learned kitesurfing to participate in an investor retreat, where she built relationships with her first angel investors including Bill Tai, a Silicon Valley super angel. In the long term, Perkins’ tenacity has enabled Canva to secure funding from the likes of Blackbird, Bessemer Ventures, and Sequoia.

“If you get your foot in the door just a tiny bit, you have to kind of wedge it all the way in.” — Melanie Perkins, Founding CEO of Canva.

Feeling inspired? Here is how startups can leverage professional networks across every step of the fundraising process.

Use Professional Network to Get Your First Investor Pitch

To land your introductory call or first meeting with investors, startups can leverage 3 networking strategies:

Attend networking events: take advantage of tech conferences, relevant events, VC-startup parties, pitching competitions, and mentorship sessions like the Female Founder Office Hours (FFOH) to broaden your professional network and pitch directly to investors. Startups can also participate in regional or topic-specific communities to network with other founders and investors e.g. Femstreet, Sogal and Female Foundry.

Get warm introductions: significantly increase the likelihood of landing an investor call in comparison to cold outreaches, especially when made via credible connections e.g. portfolio companies or other investors. The best warm introductions are made after getting consent from the investor first. To be respectful of the contact’s time, share a short blurb and pitch deck that can be passed onto the investor. Learn how to master warm introductions in this article.

Personalise cold outreaches: mass investor reach-outs don’t yield desired results, as investors receive hundreds of startup messages daily. With approximately 11,000 VCs in Europe and 20,000 in North America, it's important not to shoot into thin air. To stand out, your message should be short and specific — mention why you are reaching out to this particular investor at the venture capital fund, what huge market opportunity does the startup tap into, and where you stand in the fundraising process. EarlyBird Ventures published a great investor cold email template here. Each InMail or email today has the potential of turning into a term sheet in the future.

Use Professional Network to Land a Term Sheet

As startups progress to investor Q&A and deep dive, founders can proactively introduce potential lead investors to industry experts, advisors and other references to help get the deal over the finish line. Here are two useful contact groups that can facilitate the last steps of the fundraising process:

Industry insiders: offer to introduce potential investors to industry experts or advisors who can provide a unique perspective that supports your startup’s vision, business model, and product-market fit. While venture capital teams possess broad knowledge, tapping into insights from credible contacts can significantly increase your chances of landing a term sheet.
Founder references: startup founders should offer introductions to former colleagues, co-founders, investors etc. who can provide a great reference. Founder background checks are conducted by almost every venture capital fund prior to the investment committee and provide an authentic assessment of the founder’s personal traits. The best references come from reputable contacts with whom the founder has had a close working relationship.

How do CRM Tools Streamline Startup Fundraising?

CRM software enables startups to efficiently manage all types of professional relationships, especially with existing and potential investors. Startups typically engage with over 100 investors before closing a funding round. A CRM software can bring order to chaos. Here are 3 reasons to use a CRM for startup fundraising:

Saves time: startup fundraising can be time-consuming, especially when simultaneously engaging with many potential investors in different steps of the fundraising process. A CRM software can save a lot of time by centralising all investor communications in one place and reducing the need for manual data entry.
Keeps fundraising efforts organised: most startups are either actively fundraising or passively fundraising, where they still opportunistically meet relevant investors to keep in touch for the next funding round. With many important investor relationships to manage, a CRM tool ensures that nothing falls through the cracks.
Streamlines communication: CRM tools ensure full alignment within the founding team by coordinating investor reachout efforts, recording all interactions and reminding contact owners to follow up. Transparency in interactions within the team helps avoid awkward investor situations.

These 3 advantages for startup fundraising are enabled by the features of CRM tools, which allow startups to unlock the power of professional networks. Founders can leverage CRMs for contact management with key investors, even when they are not in active fundraising mode, since building investor relationships is a long term game. Furthermore, startups should speak to many investors and avoid putting all their eggs in one basket. The top 4 CRM features for fundraising are:

Integration of team’s email contacts: CRMs accelerate the fundraising process by centralising investor contacts across multiple email accounts and facilitating team collaboration.
Investor funnels: CRM tools can be used to create investor pipelines, enabling full visibility and analytics at each step of the fundraising process. For example, the startup can view the conversion rate at each stage of the investor funnel.
Notes and reminders: CRM software records interactions, investor calls notes, shared documents, and set up follow up reminders. Some CRMs even offer to set up follow-up sequences in case an investor doesn’t reply.
Enrichment of CRM data: some CRMs using third party sources like Crunchbase provide useful background information on investors e.g. past investments, team size, fund size, which saves your team research time.

Top CRM Software Examples for Startup Fundraising

When selecting a CRMs for startup fundraising, it is important to consider multiple factors including the core features you require and budget constraints. Here are 4 main types of CRMs for fundraising with popular CRM software examples:

Industry-specific CRMs

Industry-specific CRM tools provide a tailored solution for one or several use cases or industries. The benefit of using these CRM tools for startups is that they are built for fundraising. The disadvantages are that startups may need to subscribe to multiple CRM tools to manage other use cases like sales and marketing.

Attio is an intelligent CRM that connects all company emails. It offers a Freemium model, which allows startups to build investor funnels at no cost. Attio’s CRM company data enrichment pulls investor company logos, location, employee county and industry. Unfortunately, Attio does not have a working LinkedIn integration and its LinkedIn Chrome extension is unreliable for extracting basic investor profile details.
Folk.app has a similar UI/UX to Notion. Useful features for fundraising include Sendgrid integration for personalising bulk investor reach outs and a LinkedIn Chrome extension to import investor contact directly into the CRM. Right now, Folk’s contact data enrichment using ChatGPT is not fully reliable.

No-code CRMs

Startup teams can build their own CRMs from scratch using no-code tools. The upside of no-code CRMs is that teams can build a fully customised solution tailored for startup fundraising. However, it takes more time to set up and depending on your specific feature or integration needs, you may need to hire a freelancer specialising in low-code development. Popular no-code CRMs include:

Notion CRM offers a high degree of customisation. Startups can build investor funnels, take notes, as well as integrate emails and calendar entries. Creating a CRM for fundraising in an existing workspace like Notion also comes at no additional software cost, which is perfect for budget-constrained startups. However, building the Notion CRM from scratch can be tedious and time consuming.

Airtable platform for building collaborative applications, which can be turned into a CRM. Startups can create investor lists, take advantage of 34 native integrations like Gmail, LinkedIn and Twilio, as well as automate workflows. Just like Notion CRM, there is a high upfront time and setup cost depending on the desired features, as well as a monthly software fee of $12-$24/month per seat.

Sales & Marketing CRMs

These generally are market leading CRMs that are widely used for sales, marketing, and partnerships. While these CRMs can be also used for fundraising purposes, sales-oriented CRMs are not built for long term relationship management. There are also other limitations such as lacking company and contact data enrichment. Popular sales & marketing CRMs that can be used to raise capital include:

Hubspot is a CRM tool with over 1400 integrations used by startups to centralise data from multiple platforms. Hubspot can be used for investor funnel creation, newsletter management, and creating investor lists for the startup fundraising use case. Hubspot plans for small teams start at $30/month for 2 users or at $50/month when billed annually. Hubspot for Startups program gives eligible startups between 30-90% off in the first year and smaller continued discounts in the following years.
Pipedrive is a sales-focused CRM software designed for streamlining and managing professional relationships at scale. Startups can leverage Pipedrive’s useful features including customisable pipelines, advanced analytics, investor newsletters, and 400+ integrations for optimising workflows. Although the lower-tier plans start at $9.90/month per user are affordable, they have significant feature limitations e.g. no pipeline customisation or automations like email sequences. With more expensive plans starting at $39.90/month per user, founders can restrict team members’ visibility to the investor fundraising pipeline. This can be quite important for keeping investor emails confidential.

Mailbox Add-ons

Mailbox add-ons are email plugins that provide additional functionality within your existing mailbox and enable collaboration within a team. A universal CRM tool for startup fundraising is:

Streak is used to streamline email communication and workflows within Gmail, with its pro plan for businesses starting at $49 per user per month. Streak can enable startups to build investor pipelines, create templates for investor reach-outs, and record notes from investor meetings. Startups can also get analytics on whether the email has been opened and how many times. However, Streak is only compatible with Gmail and offers no CRM data enrichment features.

For a complete guide on selecting CRMs for startups, read more in our Startup CRMs article.

How Tiva Elevates Startup Fundraising

Tiva empowers startups to leverage their professional networks across all steps of the fundraising process — from initial investor outreach to landing a term sheet. Tiva's unique CRM features include:

Extensive integrations: Tiva centralises contacts from various platforms like LinkedIn, Google Contacts, Outlook, calendars, phone contacts and more. This allows team members to share relevant investor contacts with their team, while keeping others private. Tiva enables complete visibility into the startup team's combined investor network.
Contact & company enrichment: sophisticated LinkedIn integration imports your professional network, including granular company and contact profile data from LinkedIn. Other Tiva integrations such as Crunchbase also provide useful tags on investor type (angel investor, venture capital, family office etc.) and location.
Enhanced search capabilities: easily find the right investors by using custom or auto-generated tags. For investor prospecting, the advanced search feature can be used to put together a relevant investor list in your team’s network.
Automatic CRM data updating: Tiva updates CRM data based on profile changes on platforms like LinkedIn and Crunchbase. This saves a lot of time for startups in keeping their CRMs up to date.
Dynamic lists: Tiva provides smart lists, which can update themselves automatically when new contacts are added to the startup team’s professional network, which match the pre-defined parameters. You can forget about manually adding investors to the investor list.
Proactive notifications: receive real-time alerts on relevant changes or events within your professional network. By monitoring key professional network changes, startups can engage with the right people at the right time.

This holistic approach to contact management provides a tailwind for startup fundraising success.

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