Private equity firms often seek out new investment opportunities and are always on the lookout for promising startups. In this blog post, our expert Eric Nowoslawski provides his tips and frameworks for launching successful lead generation strategies using cold email campaigns to target potential customers and qualified leads. The topics covered in this post include: the critical importance of the subject line, personalizing your cold email approach, focusing on getting a response instead of a sale, including a compelling call-to-action (CTA), emphasizing what your firm enables, keeping your emails short and sweet, limiting follow-up emails, defining your investment offer and marketing strategy, and utilizing cold email templates.
Subject Line is Critical
The subject line of your cold email is the most crucial aspect of any lead generation campaign aimed at private equity firms. It sets the first impression and must be compelling enough to make the recipient want to open it. Your goal should be to capture their attention and entice them to continue reading.
Write with a Personal Touch
To make your cold email copy effective, you need to write like a human. Avoid using robotic language, as this can quickly make your emails seem like a nuisance to your recipients. Instead, think about how you would talk to a potential investment opportunity and provide as much context as possible.
Aim for a Response, not a Sale
New salespeople often aim to close a deal with their first cold email, but in reality, it takes time and effort to turn a cold lead into a sales qualified lead (SQL) or sales ready lead. The goal of your first cold email should simply be to get a response.
Include a Call to Action (CTA)
Potential investment opportunities are more likely to respond to your emails if you demonstrate the value you can provide to them. Highlight your competitive advantages and provide insights or results that others cannot, or are not willing to provide for free. This can include emphasizing the end goal they will be able to achieve with your investment.
Emphasize What You Enable
The most effective cold emails communicate how your firm can help the recipient achieve their desired outcome. Emphasize the end goal they will be able to achieve with your investment and include a clear call-to-action (CTA).
Keep it Short and Sweet
Potential investment opportunities are busy, and your emails are an interruption in their day. Keep your emails short and to the point, ideally under 75 words. If you find this challenging, it may mean you don’t fully understand your target audience or the potential investment opportunity, so go back to the drawing board and focus on what your potential investment wants and how your firm enables that.
Limit Follow-Up Emails
Most positive responses will come from the first or second email in your sequence. Sending too many emails may result in negative responses and lower your open rates. Based on data from SalesLoft and Gartner, it's best to send about four emails over six weeks. If you haven't received a reply, move on to new investment opportunities or new leads. If your target audience is small, wait two to three months before reaching out again.
Define Your Offer and Marketing Angle
To effectively communicate what you’re offering, you need a clear and concise investment offer. The most effective offers revolve around three things: providing growth capital, acquiring assets, or reducing operating costs. Boil your investment offer down to one sentence such as "We provide [types of investment] to [types of companies] to achieve [result]". For example, for a growth capital investment, the offer might be "We provide growth capital to SaaS companies looking to scale and reach $100 million in revenue within five years".
Once you have defined your offer, create a marketing angle that resonates with your prospects. What are they most concerned with: making more money, saving time, or something else? How can your product help them achieve this? To maximize the success of your cold email campaign, consider using cold email templates.
Try to write subject lines that could’ve been sent to your readers by their own customers or colleagues. Make sure to keep them short (2-3 words) and casual (no formal language, not capitalized). Example (good): monthly SEO analyticsExample (bad): Don’t hire your next sales development representative until you do this!(Tip: listicle-type headlines that work well for SEO articles never work well in emails).Needless to day, never bait-and-switch people in your subject lines. (Don’t pretend that you have a customer for someone and then pitch lead generation services.) Make sure that your subject lines are connected to your message.
Line 1: Why you’re reaching out
In the first line of your email, describe the reason that you’re reaching out. Did you notice an announcement about your prospect’s company? Did you just read their LinkedIn post? Show that you’ve done homework to ensure that the connection is relevant.
A useful template for this is: It looks like your company is [experiencing an event], and from my experience, this means [insight].Example: I was looking into your company, and I used the SimilarWeb Chrome extension to see that your web traffic has been declining in the last three months.
Line 2: How your product enables them to do better
Now, it’s time to describe a problem you noticed that your prospect might have and how your product can help them solve it. Example: Your web traffic might be declining for many reasons, but one big factor may be that you don’t have enough content on your site. I noticed that your last blog post was from three years ago.
Line 3: Social proof
Then, give your reader social proof to show them that you’re reputable and have past experience helping companies with similar problems.Example: I just helped [X company relevant to your prospect’s industry and size] increase their search traffic by 250% in six months through SEO-optimized content.
Line 4: Interest-based call to action
Finally, give your recipient a way to engage with you. Your biggest goal is to get an email in response. A good template for this final call to action is: if we could help you with [problem], would that be useful to you?Let’s put all our learning together in this example of a cold email from an external sales team to a financial services company:
I noticed that you're in the financial services industry and you've got a company with 15 employees. From my experience, I assume that you’re keeping a lean sales and marketing team. I’m currently working with [a financial services company similar in size to the prospect] on a campaign that is getting their sales team 2-3 interested leads a day. We’re targeting people who’ve recently changed jobs to see if they’re doing their rollover correctly. If I could help you connect with potential customers like this, would that be helpful to you?
Overall framework for an entire email sequence
In the previous section, we shared a framework for your first cold email. To recap, your first email discusses how you noticed a company, how you can solve their problems, and how you’ve done this in the past. Now, let’s go over the rest of your email sequence.
Email 2: Additional context
Email 1 was meant to succinctly communicate that your product could help your prospects solve important business problems. Email 2 is meant to add more detailed context on how. This is the place to add more information about product features or the transformation you’ll enable for your customers.Here’s an example using the financial services company we pitched above:
I previously mentioned that I’ve been helping [X company] find customers by contacting people who’ve recently changed jobs to see if they need help with new benefits packages or rollover plans. For a bit more context, we do this by constantly monitoring LinkedIn Sales Navigator for people who are changing jobs. When they change jobs, we reach out on your behalf to see if they need your services.We have the copy ready and I have a video that can show you how to build this kind of list. Would that be interesting to you?
Email 3: Angles
If your prospect still hasn’t replied, you should try using a different angle. Your first two emails, e.g., may have emphasized that your product would help your reader earn more revenue. But what if driving more revenue isn’t their biggest priority? Email 3 gives you the chance to change your angle. Perhaps, instead of emphasizing that your product can help someone make more money, you can emphasize how it can help them save time.
Email 4: The breakup email
In your final email, ask your prospect if there's somebody else at their company you should speak to. Example: I noticed that [your company] has 255 employees. Perhaps this isn't your area of focus. Is there somebody else that I should be speaking to? Data indicates that people respond to breakup emails more often than they respond to the other emails in a sequence. If you remain available to connect while offering to route yourself to a more relevant person within their organization, you will increase your chances of getting a positive reply.By now, you have a framework to use to write effective cold email sequences. This is a simple baseline that you can supplement with many different kinds of marketing tactics (LinkedIn, cold calling, ads, etc) to strengthen your results. If you have any suggestions or questions, please reach out to Eric!