Five months into gaming startup Stakester, CEO and co-founder Tom Fairey received two rejections from partners and three rejections from investors at the final stage. Things were very tight, and he only had a few days to make payroll (this was after clearing out his savings). On the brink of giving up, Fairey called a friend for coffee to discuss his dilemma and practice his pitch. Fast forward to the present day, and that coffee shop pitch saved the future of the company.
At this point, you might be wondering where the jump to success comes from. Well, that pitch roleplaying caught the attention of another patron who happened to be an investor.
“A few minutes later, a stranger walked past, tapped me on the shoulder, and said, ‘Hey, are you raising money? I heard what you’re talking about, and I’d love to hear more,’” Fairey told me. “He gave me his card, and the following day I met him for coffee. That’s when he wrote our first check.”
Yes, Fairey secured the first $50,000 of $2.5 million in funding for the entertainment app that gives gamers a platform to place cash bets on their own gameplay within games like “Call of Duty: Modern Warfare” and “FIFA 21.”As a result, the company has grown from 15,000 active users to 50,000 and tripled its staff during the pandemic, something that might not have happened if it weren’t for that coffee shop conversation.
“Serendipity is a superpower; optimize for it,” Fairey, a former IT intelligence officer, said of his advice to other struggling entrepreneurs. “You never know who might be listening or who can help you when you need it most. Meet as many people as you possibly can. Tell everyone what you’re doing and make sure you sell it. The next conversation could be the one that makes it work.”
After the coffee shop experience, Fairey became much more confident in cold emailing and shifted his outreach funding strategy.
“I think that a lot of people often make the mistake of targeting people by title or demographic,” he said. “People rightly say, ‘I want to speak to Angel Investors and VCs.’ It makes sense, as they are clearly active – but the problem is the noise.”
Fairey ran an experiment and added “Early Stage Investor and Angel” to his LinkedIn profile and received over 700 connection requests in under a month. “It’s almost impossible to stand out in a crowd that size,” he noted.
So instead, he focused on psychographics. “I wanted to find people who had the same competitive mindset as our customers – I wanted to find people like me,” said Fairey. “So, I contacted people who had sales careers, athletes, and recently promoted partners at law firms. Usually, these people aren’t getting contacted, so you’ll resonate with them, and they will almost certainly have the available capital for early investment.”
After changing his approach, he managed to raise $500,000 in money from cold emails alone. Now, Fairey has three golden formatting rules for sending cold emails that every entrepreneur should use:
- Gain Interest: “You need to get them interested enough to speak to you. If you can get them intrigued and excited, they’ll want to hear more.”
- Establish Credibility: “If you don’t come across as credible, they won’t trust you, and they just won’t talk to you. Be sure to showcase any compelling stats, relevant experience, and evidence of your capability.”
- Ask For a Call: “Always ask for something small. Never ask for investment in the email. Just ask for a call.”
He concluded, “Ask your investors what made them invest. Then, you can use this information to optimize your pitch for the next one. They give you such valuable insights – in my experience, they rarely say what you expect them to.”