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.
This post was originally published on Feld Thoughts.
My name is Chet Kittleson and I’m a human. I have eyes and ears and a nose and two nieces, and one nephew, and two sisters, and a wife, and a house and a couple of cats and a mom and a step dad and a biological dad and some friends and a history filled with good and bad and right and wrong and so much more that I can’t fit into one run-on sentence. Like I said, I’m a human.
What I’ve done with this first paragraph, hopefully, is began to build up trust between you and I. The type of trust that extends beyond the walls of LinkedIn and Twitter, and into a meaningful relationship between us as human beings. I’ve exposed more than simply what I do for a living, and in doing so, I’ve broken down a wall that previously would have created a barrier between where we stand now and where we might stand a week or a month or a year from now.
This sentiment is meaningful in every walk of life, but in business development this is the difference between failure and success. It’s not Microsoft or Google or Amazon that you’re looking to partner with, it’s Mary or Matt or Lindsay.
“Companies don’t make deals with other companies. People make deals with people. Understanding the motivations and incentives of the relevant people involved is critical to getting a deal done,” said Greg Gottesman of Madrona Venture Group.
The old adage, “it’s not what you know, it’s who you know” should be something closer to, “it’s not what you know or even who you know, it’s who you can influence.” And to be clear, influence is not in the same family as manipulation. Influence is based off of authenticity and trust built by years of friendship and communication. People who genuinely trust you to help them make smart decisions based on their needs as human beings as well as the needs of the companies they work for are in your sphere of influence. This is where the bulk of real and lasting business happens.
You’ll be surprised at how captive another person will be when they view you as an industry expert on things that pertain to their needs, rather than an expert at selling whatever it is you’re selling. Send them suggestions on other partnerships or products that have nothing to do with your organization. (Thanks to T.A. McCann for that nugget.) Connect them with your competitors if they’re able to offer something that aligns better with their goals. Stay relevant and true and you’ll be invited into conversations and email threads that otherwise you would have never been privy to.
“I never would have imagined what a profound impact the people I bonded with – co–founders, investors, mentors, partners – early on in my entrepreneurial career would continue to have in my personal and professional life over 15 years later. What better investment can we all make than in the people we respect.” said Mike Fridgen, GM at eBay and former CEO of Decide.com.
So if you’re interested in pursuing a career in business development, or are new to the field, here’s your first call to action: drop every book you’re reading with “sales” in the title, walk outside, and meet someone. Then meet someone else. Then go back to the first person you met and ask them how they’re doing. And all the while, don’t forget for one second that every single person you’re meeting is ridiculously human. Every one of them, regardless of their title, the number of connections they have on LinkedIn or the amount of budget they have control over, they’re human and they have eyes and ears and a nose and nieces and nephews and sisters and brothers and wives and husbands and all the rest.
Second call to action: start selling something. Anything. Learn how to remain human when money is added to the equation. Cold call strangers out of the phone book, set up camp outside of a grocery store, and learn to build trust out of nothing in an authentic way. I’ve worked with partners on $500 deals and I’ve worked with partners on $500,000 deals, and in the end it all comes down to your ability to understand those on the other side of the table. Start with beef jerky like Noah Kagan did with his 24-hour business challenge, and work your way up from there.
Good people are everywhere, even in the business world, and as the barriers fade away those who you once referred to as contacts or connections turn into, don’t let this word intimidate you, friends. They turn into people you can share stories with, people you can consult with on the next fiscal years partnership proposal, people who can help and that will at some point need help. It’s simple, but if you can remember this throughout each coffee meeting and each conference call and each email, you’ll be just fine. Hey, that’s one human’s opinion though.