If you’ve read anything about pitching your company, you’ve probably come across advice that says that you need a warm introduction to an investor. Without a doubt, a good, friendly introduction — ideally from a founder they’ve already invested in — is the best way to get on the radar of an investor. But if you don’t regularly attend barbecues at the Sonoma mansions of venture capitalists, don’t worry — access isn’t the only way to raise money.
Warm introductions
A “warm introduction” is one made by someone the VC knows well, by someone relevant. The VC might know their kids’ school teacher pretty well, for example, but the school teacher may not have a lot of startup or investing experience.
That’s a less warm introduction than one made by a founder of a startup in which the VC invested. Better than that, even, is an introduction from a founder who has already made the investor a lot of money through a previous exit. I don’t have to explain how this works; if you know investors personally, schedule a coffee and pick their brains. You don’t need an intro for that. If you know other successful startup founders, talk to them — they will make intros if they believe in your vision.
Unless you’ve been circulating in the startup ecosystem for a long time, odds are your list of founder buddies or investor friends is pretty short. Now, you may have to do a bit more work.
The idea of introductions is all about the network: It works as a filtering system. Any given founder will forward perhaps one or two deals per month to investors; those go to the top of the list, especially if the introduction adds some context about the strength of the connection. “I’ve worked with them for 15 years across three companies, and I have invested my own money in this company at the angel stage,” is better than “I met them at a party once.”
The problem, of course, is that networks can be opaque. Perhaps an old friend you used to work with at Google is a childhood friend of a well-known venture capitalist? Maybe your former boss went on to start a company, raised money from someone relevant to your company and would love to do an intro?
Mine your LinkedIn connections
LinkedIn is the perfect tool for doing this type of research. Make a long list of investors you might want to talk to: It’s time to research on LinkedIn.
