Don't ask for introductions to investors

http://www.danshapiro.com/blog/2011/09/dont-ask-for-introductions-to-investors/

by danshapiro • 15 years ago

41 6 15 years ago

dotBen• 15 years ago

The post reads as if investors are these unicorn creatures who hold the balance of power - they must be pitched with optimum precision otherwise you'll go no where.

The reality is investors need deal flow and want to learn about new companies, especially associates and non-partners.

"if the nicest thing they can say about your company is that it “sounds interesting”, the intro isn’t going to go anywhere."

Depends on who's writing "sounds interesting", frankly. If it is a successful founder of a portfolio company or entrepreneur who exited with a nice return for the fund, that might be a great seal of approval.

Which leads me to the main reason I still agree with the premise of not asking for introductions - and that is a VC/investor's contact network acts as a gatekeeper for good deals. And so if I'm in that privileged position, I don't want to use up my social capital helping friends with bum-deal companies get introductions. So please don't ask me to.

Sadly, that wasn't really mentioned in the article.

danshapiro• 15 years ago

Re: investors needing deal flow, I think you'll agree that investors need quality deal flow. The goal of the article is to up your company from being just deal flow in to being a part of quality deal flow.

I think your last point is that if your company is crap you shouldn't expect an introduction. I agree with that, of course, but "What do do when your company is crap" seemed a little outside the scope of this particular post!

wnight• 15 years ago

You need to be something your friend will find worth mentioning. You can get people to drop your name but if you want them to do so positively it needs to be something they can get behind. Your pitch needs to sounds good, from them, or it won't be worth much.

Also, your company needs to be something the investors will believe your friend has an ability to judge or they'll discount the recommendation.

amirmc• 15 years ago

> "Furthermore, investor styles differ. Some give you tons of room to maneuver; some like to work closely with you. Some offer tons of help and advice; others are just about the cash. Some will want regular updates; others don’t like to be bothered ... figure out what kind of investors you want, and what kind of investors will want you."

Obviously that sounds like a great thing to consider but how exactly does a new entrepreneur figure that out? It might be possible if you're after the Fred Wilson's and Mark Suster's of the VC world (just read their stuff) but it wouldn't be as easy for many others. How would you suggest someone begins?

soonisnow• 15 years ago

Clearly not every investor is as explicit, prolific (nor as insightful!) as Wilson or Suster, but many, even the most modest-sized and earliest-stage investors, have posted something specific about what attributes in teams they look for and what broad or micro themes they focus on; many have a "Portfolio" page which can yield lots of useful information on the companies they've already chosen to support, and why. Finally, believe it or not, CrunchBase is a solid way to connect the dots - if you think XYZ or ABC investors would be a great strategic fit based on their portfolio co's, go and see who _else has invested in them, since they're likely to care about a lot of the same dynamics.

A tiny bit of homework goes a long way in getting an investor to return your email, and in getting someone to feel confident in making that initial intro..

JacobAldridge• 15 years ago

Specificity with referrals is definitely the way to go.

I'd make one minor change to Step 4 - instead of "And are there any other investors you can think of that I should be talking to?" (which is a closed question, easily answered "No" without a lot of thought)

try asking "Which other investors can you think of that I should be talking to?" They can still reply "No, your list is great", but the open question prompts their mind to find an answer, which is more likely to lead you to another investor who could match but you didn't know about before.

Don't ask for introductions to investors

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