Always Be Networking

Coffee might only be for closers, but venture funding goes to networkers.

You are the sum of the five people you spend the most time with, as the old adage goes. There is no industry where this is more true than in entrepreneurship.

Venture capital, especially at the early stage, is the business of judging people on their ideas and connecting them with others. When a startup founder goes to pitch a VC for funding, they hope that the ultimate outcome of a pitch is to secure funding from the angel/syndicate/fund to which they are pitching. Still, a successful pitch can include a “pass’ decision by the VC, but a warm introduction to another investor in that VC’s network. It is important to note that this strategy is only a good one if the investor passed due to fit and not due to a lack of confidence in the success of the venture (or else the intro would not be warm).

A pitch that isn’t quite ready for investment or for a referral to an earlier VC still might warrant an intro to a portfolio company, advisor, marketing agency, product designer, etc. Also, VC’s are not the only ones who can make introductions. Old classmates, friends, professors, coaches, etc. can do the trick. There is a reason 28-year-olds making hundreds of thousands of dollars a year give up two years of salary and pay an equal amount to get their MBA (hint: it isn’t to learn how to model a DCF). Your network is your biggest asset, especially as an entrepreneur. Honing it is oftentimes more valuable than an investor on the cap table or a professor teaching you how to conduct Michael Porter’s Five Forces framework. Coffee is for closers, but great companies are built by great networkers.