Nivi · September 30th, 2008
“VCs are generally bombarded by requests for meetings, so a warm introduction helps an entrepreneur’s request float to the top of the list.”
Summary: The best way to get a meeting with an investor is through an introduction from someone he listens to. The best intros probably come from entrepreneurs that the investor has worked with. But the specifics of the middleman’s relationship with the investor are more important than the middleman’s day job. Finally, skip intros from (1) investors who don’t have a good reason why they’re not investing and (2) middlemen who barely know the investor.
The best way to get a meeting with an investor is through an introduction from someone he listens to. (You could cold call him but you better have a great elevator pitch and you should read How Should I Approach a VC I Don’t Know?.)
But not all introductions are created equal. Who makes the best introductions? Introducing the Hierarchy of Middlemen:
- Entrepreneurs that the investor (a) has backed and made money with, (b) wants to back, or (c) is currently backing (in that order).
- Investors he (a) has co-invested and made money with, (b) wants to co-invest with, or (c) is currently co-investing with (in that order).
- Lawyers, accountants, and sundry industry people like us.
- Communists.
- Someone he met at a party once.
This list is really rough.
The specifics of your middleman’s relationship with the investor are more important than this list. So figure out why the investor is going to pay attention to the introduction by asking questions like:
How do you know the investor? What did you work on together? What companies have you sent him that he has subsequently backed? What makes our company interesting enough for you to make an introduction?
Middlemen you should avoid.
You don’t want introductions from investors who don’t want to do the deal and don’t have a good reason why. An introduction by a middleman who can and should invest but doesn’t want to invest is a strong negative signal. Skip this introduction.
And you don’t want intros from people the investor doesn’t really know or doesn’t listen to—that just makes you look bad. If the introduction starts with “I don’t know if you remember me,” you’re in trouble.
Topics Introductions
I’m wondering where a newcomer to the VC world fits into the good/bad recommendation list? Would someone who has interned at a Venture Firm provide a good recommendation to that firm?
The specific of the case are more important than the category of the middleman. It depends on whether the partners listen to the newcomer. If yes, I think it is a great intro.
“Entrepreneurs that the investor (a) has backed and made money with, (b) wants to back, or (c) is currently backing (in that order).”
You are so right! I met an entrepreneur at a meetup. We chatted. He went back and talked about me to their VC. In the next two weeks I received no less than five emails from the VC to meet him. I was traveling across the country and wasn’t sure when I would be back in town. Nevertheless, I found it very interesting how aggressively this VC was pursuing me.
He later told me that he takes EVERY recommendation from guy x very seriously. Even when the entrepreneur isn’t proactively seeking out any VCs.
Very true – every investor we’re in touch with is via a warm lead (or some reach out directly, which I still find surprising).
On semi-related topic, how kosher is it to name-drop other investors/VCs who you are talking to. I know one of your hacks is all about creating competition/scarcity when it comes to seeking term sheets, but can you actually say specific names? i.e. “oh we have strong interest from XYZ so we’re a bit tight on time.”
You generally don’t want to tell people who else you’re talking to. There is a chance they may decide to work together against you.
But you can say that you are talking to other investors and your confidence and body language will get the message across.
Nivi’s makes a good point about name-dropping. VCs won’t be impressed you are talking to other (or big) firms. Now, if you already have a potential lead and are looking to form a syndicate for the round thats another story.
Some good points here about the value of the introduction being tied to the credibility of the source. This highlights the value of a thoughtful introduction from a trusted source vs. an “InMsg” on LinkedIn for example. At NVA we don’t make introductions unless we are bullish on the project and the entrepreneurs, and we know the investor is looking for deals in that given market. Less is more in many cases.
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