Understanding the Investment Landscape

If you're involved in the investment sector, I'm here to facilitate connections between promising startups and venture capitalists (VCs). I recall the moment I realized that my startup urgently needed funding to thrive. The urgency for external investment felt overwhelming, and I thought I was the only one in need.

However, I soon recognized that there were investors out there actively searching for startups like mine. They, too, faced their own pressures—seeking viable opportunities to secure their financial goals.

Startups often view the situation solely from their perspective, assuming that VCs are inundated with applications and hold all the advantages. While it’s true VCs receive a multitude of proposals, they also grapple with demanding quarterly performance targets that can be challenging to meet.

In many cases, a VC's success hinges on identifying that one startup capable of delivering returns of 50X-100X. To achieve this, they diversify their investments, hoping at least one will yield significant profits.

Recently, I spoke with a contact from Moonshot, a network dedicated to private investments, including companies like SpaceX. He shared his frustrations about finding suitable startups. The options were either too exceptional to accept their investment or too perilous to consider.

About a month later, I encountered an impressive health tech startup based in Poland. They had enormous potential and had already secured around a million dollars to develop their Minimum Viable Product (MVP). During our conversation, it became clear that their priority was the product itself.

This scenario creates the ideal conditions for investment:

• A dedicated team
• An exceptional product
• A growing market

They inspired me with their statement: "We’re not just looking for any investor; we require a warm introduction to someone who fits our needs." This struck a chord with me, as it mirrored what I had learned from my conversation with the individual from Moonshot.

This led me to initiate a project that I anticipated would be both challenging and fulfilling—a newsletter named Warm Introductions. The purpose of this newsletter is straightforward: to connect investors with suitable startups.

Recently, another VC from my network reached out, seeking a tech startup focused on software or IoT, with an Annual Recurring Revenue (ARR) of $250k or more, looking to raise Seed to Series B funding (between $1 million and $40 million).

I launched the newsletter and reached out to my network, resulting in approximately ten responses. Some of these did not align well with the VC’s criteria, so I advised those startups to look elsewhere. However, a few did meet the criteria and had promising teams, so I shared their details with the VC. If he finds them suitable, I will facilitate a warm introduction.

This approach is as simple as it sounds. Traditional "investment brokers" often perform similar functions but charge commissions for their services. Others may seek equity in return. My goal is to leverage the potential of these connections. Naturally, I won’t work for free, so I plan to implement a subscription model for the newsletter, starting with a modest fee that will increase over time.

If entrepreneurs are willing to pay $1,000 monthly for pitchbook subscriptions, I believe many would also invest a fraction of that for a chance to connect with the right VC.

Currently, I’m testing the waters to validate the demand for this newsletter and service by engaging with my VC network and continuously refining my approach. For example, here’s the performance data from one of my warm introduction emails:

The open rates for this newly launched newsletter have been promising.

Now, I’m reaching out for your insights. I genuinely appreciate feedback from the Medium community and my readers, who have provided invaluable perspectives. If you’re a VC or angel investor, I’d love to hear your thoughts—particularly any concerns rather than just positives. One recurring issue raised is the scalability of this model.

It’s crucial to note that this service isn’t designed to scale endlessly. I aim to serve around 1,000 startups, allowing for new entrants as others qualify out. Promising this service to a million startups would dilute quality and be unfeasible.

If you are an entrepreneur or startup, do you believe this could simplify your process? What concerns do you have? Would you rather explore alternatives or conduct your research and outreach independently? Please share your thoughts in the comments.

And if you’re neither an entrepreneur nor a VC, I jest—feel free to stay! Some of the best insights come from third-party perspectives, which often surprise me.

So, drop a comment with your opinions or questions, and let’s initiate a dialogue. It should be engaging!

I dedicate 96% of my time to this newsletter, which is approaching the milestone of 1 million views on Medium, with 17,000 incredible readers.

Here’s a link to Warm Introductions if you’d like to join my network.

I’m Al, a business consultant based in Zurich, Switzerland. I’m committed to providing valuable content for my readers. Connect with me on social media if you’re interested in what I have to offer.