Many entrepreneurs will recognize this scenario: You finally get a meeting with a big-name VC partner. In preparation, you spend a week polishing your deck, financial model and pitch. Then, you get to your meeting and the partner is 20 minutes late. Plus, he or she has to run on the hour, so you have 40 minutes to squeeze everything in.
So, you start running through your pitch while the VC looks on, at best, half interested. Then as you wrap up, the VC says something like, “your business is not a current fit for their fund” or “it’s too early and you should come back with some traction” (see my previous post on Micro-Traction).
But, then something that may seem weird to a first-time founder happens.
Just as the VC is passing on your deal, they start dropping names.Though they aren’t going to invest, they know the VP of Cloud Services at Google, an editor at Vogue, or some other relevant contacts that could be partners or clients to your business.
I’ll admit, I often partake in this very behavior at Wonder Ventures. It comes from the genuine desire to help founders, whether I will invest or not. I can see they’re putting everything into their company and I want to use my network to help (and I assume most VCs that name-drop are doing the same thing).
But trust me. For all the times that I offer relevant introductions to entrepreneurs, the percentage of them who take me up on this is way too small. So, I put it to all entrepreneurs to not overlook this opportunity. Here’s why:
Even if they “passed,” it shows your follow-through
Hustle is one of the most crucial qualities of an entrepreneur and something I always look for before investing. Even if I say I am not going to invest right now, if I offer to make an intro for you and you don’t follow up (much less write it down), then what kind of hustle do you have? How are you going to overcome the many hurdles that stand in the way of a startup, when you can’t even capitalize on an intro handed to you on a silver platter? Some investors use this as an implicit test. So follow through, and you’ll pass.
It’s the best way to build your relationship with the investor
If you take the time and effort to follow through on the investor’s connections, you could turn these introductions into relationships, or even pilot customers and business partners. As a result, the next time that investor catches up with the friend they connected you with, that friend just might mention how excited they are by you and your company.
This, in turn, could bring a great investor back to the table and possibly push them over the edge to invest in your business.
It might show that you don’t want them to invest
The relationship with your investors is key. So, any investor who offers introductions offhand and then can’t follow through is probably an investor you want to avoid. Either they’re overstating their connections, or they just aren’t very helpful. Either way, it’s a sign that they won’t be a very supportive (or trustworthy) investor.
#StartUpHack: Use VCs for Business Development
This is also a hack that I give to many founders. It’s hard to get introductions to potential partners and customers. After all, you’re running a startup and can’t afford a sales team. But, VC introductions and due diligence can lead to tons of great connections, usually directly to company founders.
For example: If your company sells dev-ops tools to SaaS companies, what better way to get in front of them than as part of due diligence from a VC with a deep SaaS portfolio? Work to get these introductions and you’ll significantly accelerate your business development pipeline.
In sum, these introductions from investors serve as one of the best ways to build relationships with them, as well as a subtle form of due diligence of you and your company. Don’t overlook them and don’t forget to follow up. Because if you over-deliver on these intros, you’ll see that many investors will get excited to be a part of your startup.
This was originally published on Medium.