Investor Fireside Chat with Chris Deutsch
Chris Deutsch, Founder of Lofty Ventures, and re-founder and Board Director at teaBOT, joined me for a fireside chat to share his 25 years of experience investing in and working with early-stage startups, as well as how to cultivate a network of diverse partnerships with founders and investors during outreach, and the role of an investor in the entrepreneurial ecosystem.
With a goal to enable founders to become first-check angel investors, Chris and his partners at Lofty “created a syndicate that enables [their] community of co-investors and friends to follow [them] on a portfolio company that [they] previously invested in and invite [their] founders to become investors in their peers in the lofty family.”
Chris and his team are founder-focused and driven by the belief that investing in and supporting diverse and underrepresented teams creates a start-up ecosystem where everyone wins. While over ⅔ of Lofty’s portfolio companies are led by underrepresented founders, the syndicate does not have the mandate to invest solely in underrepresented teams. They simply pick the best pitches and are committed to helping founders grow holistically as humans and entrepreneurs.
Investors want to build relationships with founders who are thoughtful. The key, in Chris’s opinion, is to define your list of targeted investors, spend time getting clear on your thesis, and personalize your pitch. Making that investment upfront will not only pay dividends for your company, Chris says, but for the rest of your career.
“The first step is to go through and find as many different investors as you can, but that fit inside of what you're doing, what stage you're at, and where you're located. Investors have specific filters that they look at, which are going to determine whether or not they respond,” Chris says. Spend time doing a bit of diligence on your list of investors and ask: “Do I fit their thesis? Do I fit their stage? Do I fit their geographic preference? Do they invest in my competitors?”
In your initial outreach, Chris says to include a few sentences on what you do, what your traction is, and what investors are currently on board. Give the potential investors some bullet points they can quickly scan, and then wrap it up with some details on the terms of the round. Show the investor why they should talk to you and what makes their fund uniquely positioned to be a fit for your product. For tips on refining your narrative and perfecting your pitch, you can revisit my discussion on competitive storytelling with Robbie Crabtree from our Ready to Raise boot camp.
Having an introduction to an investor by someone they know and trust will greatly increase your chances of getting a response. To build your network and identify potential introductions, one of the first things Chris advises his founders to do is tap into their founder network.
"One of the best ways to get introductions to investors is through your peer founders. Investors love getting intros from the founders they’ve already backed because there’s a high level of trust. Get to know other founders in the community and don’t just ask them who the best investors are, also ask which investors to stay away from. Bad investors can be extremely damaging and very difficult to unwind from a cap table, so it’s really helpful to put them on your radar early and avoid them like the plague.”
Chris also mentions checking out investors on social media and engaging with their content. Additionally, seeking out founder and investor communities like ours at the Angel Club is also a great way to grow your network and is one of the reasons we launched Intros this year.
The Role of the Investor
Founders and investors both want to invest in people who have the best intentions for our collective future. While investors have to be very thoughtful of who they invest their dollars in, they must also be mindful of how they treat the founders who approach them for investment opportunities.
“Investors need to do a better job of being human with the founders that we interact with, and that's across the board,” Chris says. “They're people too, we need to be human, and good to them, just like we expect them to be human and good to us. If we do that, we're all going to have a lot more fun, and we're all going to make a lot more money together.”
As an investor, if someone pitches to me, and it is not the right fit, I think about how I can help them, who might be a good fit, and how can I make those introductions. Be thoughtful about your interactions in the ecosystem, and give without expecting anything in return.
*Looking to become an investor? Join in on our next Angel Investing Course to gain valuable insight and explore whether angel investing is right for you.
🤓 Investors looking for access to the deal flow that we get and share with our members can sign up here. Not a member yet? Join now and expand your network through curated resources, events, introductions, and mentorship opportunities from globally recognized investors, founders, and experts in the inclusive Angel Club entrepreneurship community.
🎞️ A full version of the recording, in addition to investor and media databases, playbooks, templates, and tools can be found in the members-only Angel Club Resource Library.