It's not what you know, but who you know.
Its not who you know, but who they know.
Its not who you know, but how they know you.
Investors don’t want to meet you. They wanted to be introduced to you
11–20 of 62 posts
Re: Investors don’t want to meet you. They wanted to be introduced to you
#12Argues its impossible to find the needle in the haystack, so VCs use other founders to sift the chaff. But a VC was quoted that they funded zero cold contacts. That doesn't sound like its hard; it sounds they're incapable of evaluating cold contacts at all. I'm guessing they use contacts for their expertise, because VCs lack any.
Why would they run the risk if they have enough warm leads from trusted contacts? The VC money to startup lead ratio is obviously one sided to present sufficient profit motive to invest in cold introductions.
If the VC market becomes sufficiently in favour of warmly introduced startups that there is profit motivation in investing in those startups that cannot garner warm introductions then someone will do it. But they will be assuming much greater risk.
Re: Investors don’t want to meet you. They wanted to be introduced to you
#13If you’re working in any startup hub, you almost certainly have friends that are working on their own startups. Ask them to help you. The first question should be, “Am I ready to fundraise?” I would actually phrase this another way, "Be honest with me: If I asked you to refer me to one of your investors, would you recommend me to him/her or is my startup not there yet?"
As someone who, like the OP, is often on the other side of that conversation (I've helped startups raise seed funding and get into accelerators), here are a couple tips:
1) Be specific. Which investor do you want an intro to, and why? I know my investors well. Some of them love meeting early-stage startups. With others, you are wasting your time unless you've already raised significant capital. Other times I can't help at all (recently got asked for an intro by a B2C company--I know my investors from a B2B perspective since that's where my company is, and I'm not sure who would be a best fit for a B2C company.)
2) Be real. If you don't have any customers/pipeline, traction, or even a working demo, you're not ready for investment. For some reason there tends to be a pervasive belief that a "napkin idea" can get funded. Maybe 1% of the time, that's true. But even with a previous exit under my belt, I still had to have some form of traction before I got investors onboard. If you have nothing except an idea, please feel free to ask for advice, but don't ask for advice on looking for investors, because I'm going to tell you to focus on traction first.
Re: Investors don’t want to meet you. They wanted to be introduced to you
#14Ooh, this one is really good. Also heartbreaking as someone who invested a TON of time into making personal investment calls. I definitely learned this one the hard way.
One thing that I would add also is that investors don't seem to want to be introduced to you by their non-investor/non-business contacts, so their friends and acquaintances. I learned this one also because I figured that would be a good approach. What seems to happen in this case is the "stink" on you gets transferred to the intermediary and the investor picks up on it.
Re: Investors don’t want to meet you. They wanted to be introduced to you
#15This leads me to the question: How you get networked with people that know investors, when your startup is in a non-hub place? (like, not in United States or Europe)
Re: Investors don’t want to meet you. They wanted to be introduced to you
#16I'm impressed with Jason's posts. He seems to be methodically working through all the misconceptions of inexperienced founders. This is an important and subtle one. Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. Even if investors didn't start…
Also, what are your thoughts on the implications of this tendency of VCs as it pertains to teams outside the Bay Area or outside the US, who may have just as much talent and hustle but are forced to work that much harder and longer to get the same intros and connections (at the opportunity cost of spending more time on product & customers)?
Is there a way to bridge that gap and make the process more equitable in different geographies and networks?
EDIT: Removed the first part of my original two-part question because it was less relevant to the OP.
Re: Investors don’t want to meet you. They wanted to be introduced to you
#17Forget about investors. Bootstrap your Company. When you are successful, don't mind them. They like to reap where they have not sown.
Re: Investors don’t want to meet you. They wanted to be introduced to you
#18So is it the same meritocracy(1) of being accepted on a top university? (1) http://www.justiceharvard.org/2011/02/episode-08/
Possibly so. People have limited time to process evidence to come to a decision. So they seek out the types of evidence that provide stronger signals. That may cause some false negatives, but since you know it now, that's pretty much your problem. No one owes you an investment in your startup.
(I think this is far less of a problem than access to education, as someone in the position of founding a startup is already on a very high tier of agency and privilege compared to the vast swath of society. Also, you're "born with" connections to startup founders at a far lower rate than you are born with connections to universities, in general.)
Great link, though, thanks!
Re: Investors don’t want to meet you. They wanted to be introduced to you
#19I'm impressed with Jason's posts. He seems to be methodically working through all the misconceptions of inexperienced founders. This is an important and subtle one. Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. Even if investors didn't start…
Also, what are your thoughts on the implications of this tendency of VCs as it pertains to teams outside the Bay Area or outside the US, who may have just as much talent and hustle but are forced to work that much harder and longer to get the same intros and connections (at the opportunity cost of spending more time on product & customers)? Is there a way to bridge that gap and make the process more equitable in diff…
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Re: Investors don’t want to meet you. They wanted to be introduced to you
#20I'm impressed with Jason's posts. He seems to be methodically working through all the misconceptions of inexperienced founders. This is an important and subtle one. Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. Even if investors didn't start…
Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust.
So you're admitting that they're social-proof whores who refuse to think for themselves, even about the subject matter of their own jobs?
VCs should be mortally humiliated by the fact that the game they're running is, after all is counted, a feudal reputation economy-- all flashes, no substance.
Yet people are surprised that VC, as an asset class, has been a stinker for the past 13 years.