Love it or loathe it, networking is an essential skill for founders to master and maintaining a strong network is key to building a venture-backed startup. Successful startups are able to raise and deploy VC money effectively to scale rapidly and capture marketshare. Having a great rolodex of VC investors maximises your chances of fundraising.
While there is no substitute for a having a great network, most founders don’t start with one and the world is far more connected than you probably think. It’s never too early to build your network. So whether you’re already a founder or still studying, here are our top tips for building your network.
Direct networking: Who do I know
Direct networking is simply getting introductions from people you already know to organically grow your network. This approach is time consuming but, if done correctly, has the highest hit rate for meeting investors. The best way to do this is being systematic and making a list of people you already know in three key groups:
Investors
The most obvious way to get intros to investors is from other investors. Venture Capital is a tight knit community and investors talk to each other — a lot.
The risky nature of startup investing means that investors often sit side by side on the same cap tables (which grow with every round), syndicate deals with each other (leading, following or co-investing) or simply get second opinions on companies and founders.
Be mindful that VC is a competitive world and so an investor matching your criteria is unlikely to make introductions before they’ve decided whether to pass or invest. For this reason, investors not covering your stage / sector are likely to be the most helpful with intros.
Founders
Just like the VC community, the founder community is also very tight knit and can be a great way to boost your network. A fundraising process may involve a founder reaching out to as many as 200 investors, resulting in dozens of meetings.
Exchanging contacts or simply asking other founders for investors they can introduce you to is a great way to grow your network. Even if an investors passed on another founder, the hit rate from these introductions will be much higher than with cold outreach.
VC recruitment pools
Most VC investors have similar backgrounds and join funds from finance, consulting, startups and business school. Make a list of people you know in these groups and ask them if they know any investors. There’s a good chance someone they worked or studied with has left to join a VC fund.
Indirect networking: The power of media
Using media to generate inbound investor interest is another important long-term strategy to boost your network. Depending on your business model, it can also help you win customers.
The best place to start is building an audience on social media by posting on Twitter and LinkedIn. Over time, as your audience grows, you may catch the attention of an investor who reaches out to you. It’s important to be consistent and understand how to use the algorithms to your advantage.
Another often missed but highly important strategy is sending out monthly or quarterly updates to your shareholders and investor contacts. Achieving certain milestones might prompt investors to share your updates with others which can generate inbound interest.
Events: Getting face to face
Finally, a great way to quickly meet founders and investors is by attending startup events. This can be anything from industry social events, co-working events, pitch competitions and even conferences!
As well as running dedicated programmes, accelerators, incubators and universities also host events for startups to get together. Y-Combinator Summer School hosts several virtual and in-person events for founders on the programme.
Online networking tools such as Lunchclub, which uses AI to match you with others, may also be a good way to build your network.
Wrapping up
It’s never too early to start building your network and the best time to start is when you don’t need it. Founders who are able to raise venture capital often have a strong investor network in place. The good news is that most of the work can be done before you even have a product or service to offer. By following our tips, you’ll be on your way to building the investor network you need to scale rapidly and take over your industry. So get started today and good luck!
