Contrary to popular belief, most investors are specialists and invest only in their areas of expertise. Through specialization they’re able to gain an advantage over fellow investors and identify promising investment opportunities. All but the biggest investors focus on particular domains. Many new founders looking to raise money for their startup will pitch any investor who will listen. While most investors will take a meeting, few are actually eligible to invest. Fundraising is basically a full-time job, so you have to be selective, and focus your efforts where you’re most likely to succeed. Your time is best spent with investors who are active in your space and have capital to invest (many fund are already fully committed).
Do your homework to make sure that you’re not spinning your wheels. There are a number of ways to figure out an investor’s specialties. Most investors announce their areas of interest on their website. If it’s not clear, you can always ask. The next best method is to look at their portfolio companies. If they have companies in their portfolio in your space, you’re off to a good start. You can also look at the backgrounds and areas of expertise of the people who run the firm. Finally, you can also track down investors by looking at other funded companies in your space.
While it may feel great to “get a meeting” with an investor, getting a check is more important.
