Over the last year I’ve been getting a lot of introductions and requests for intros to other investors. I’ve been surprised by the low quality introductions some people make so I figured that writing a little about what makes a good investor introduction could be useful for the connectors out there.
Making the Right Introductions
Just because someone asks you to connect with someone isn’t a good enough reason to actually make the intro. Think very carefully about whether there is a fit between the two people. If someone you know has an “idea” and asks you for a connect to a VC, and you know that the VC doesn’t invest in “ideas” then feel free to tell that person that you’d be happy to make the introduction at a later date, when they are past the “idea” stage. Don’t forget to explain why the introduction might be premature.
You should also feel free to ask the person asking for an introduction, why they want an intro and if they are prepared for the connection (point them to 10 Things to Consider Before Approaching a VC).
What Making an Introduction Means
When you make an introduction to someone, the process has significant implications for you. Let’s think this through a little:
- You know person A that others are trying to get access to.
- Person B knows you and is trying to get access to person A.
You’re the gatekeeper. You should be thinking about how well do you know person B. Is person B an awesome person or is person B, not-so-awesome? If person B is not-so-awesome or you don’t know them that well, it’s ok to decline the request for an intro. You can say something like, “I’m sorry, but I don’t know you well enough to make the introduction.” Person B may not take it well, but, they’ll get over it.
Next. How well do you know person A? If person B is trying to get access to person A, chances are that others are also trying to get access to person A. What does this mean? Person A is probably getting more introductions and cold calls than they can handle or want.
If you do successfully wind up making the intro and if person A is not impressed with the intro, it will hurt your ability to make future intros and it will impair your ability to make the connection with person A stronger.
On the flipside, if person A turns out to be not-so-awesome and doesn’t gel well with person B, you haven’t lost much, but the chances of person B appreciating your spent social capital in making the intro is minimal.
Spending and Building Social Capital
As you meet new people, it’s important to nurture those connections. How to nurture them depends on the context of the connection. However, at a very basic level, you should be building trust. Building trust/social capital takes considerable time and effort.
It’s much easier to “spend” your social capital by making introductions when people ask for them because:
- You may just want to be a nice person
- You may want to be able to prove that you are a well connected person
- other reasons
However, do think very carefully before spending that social capital because it could either multiply when you make good intros or disappear when you make bad ones.
Sample Intro 1
Below is an introduction I received a few months ago from someone I barely knew (names are changed).
[FRIEND A] is a friend and client to me. He has been involved in couple of web sites and businesses.
He is currently looking for some investors and VC’s. He shall connect with you with his requirements and please try to help him with investment.
Why wasn’t I impressed or looking forward to this intro.
- Weak Connection: I have never met or spoken to “Mr. Connector”. I have exchanged emails with Mr. Connector when he wanted to volunteer for Startup Weekend. In the end, he went dark, never showed up. Never did anything.
- No understanding of investment thesis: He made no effort in the email to understand what I was looking for as an investor, what my thesis was, etc.
- No signal: He didn’t spend any time qualifying the person asking for the intro and signaling that info in the email.
- No context: For all I knew “FRIEND A”, could be asking me to invest in his gold buying business.
“FRIEND A” eventually emailed me as well
Hi [MR. CONNECTOR],
Thanks for the Introduction
@Pankj Nice to e-meet you,
We are currently developing ad network platform and will be launching it soon.
If we get an first round or angel investor I would be really glad and helpful, let me know what would you need from me to proceed for funding, I will arrange ASAP.
Yes, the email is copy and pasted exactly as it was received and yes, “Friend A” didn’t take a minute to check the email he sent realizing that he misspelled my name. Generally not a big deal but when you’re first connecting to someone, you want to put your best foot forward. In any event, I took a few minutes and responded to “FRIEND A”.
Hi [FRIEND A],
1) what’s your angellist profile?
2) what’s your LinkedIn profile?
3) what businesses have you been in and what have you done?
4) send me your investor deck
5) how much are you planning to raise?
6) what kind of ad network are you building?
7) why are you building another ad network?
8) how many customers have you brought on board for this ad network?
9) how many ad impressions have you shown this far and across how many sites/devices/etc?
10) are you raising via equity or convertible?
I never heard back from Mr. Connector or Friend A after asking them the questions above.
Sample Intro 2
Here’s an intro I received a few weeks ago. We are friendly even though we don’t know each other very well. However, I really respect him and the work he has done (again, names, numbers, details changed).
Hope your’re doing good. I though of putting [ENTREPRENEUR] in touch with you. I’ve know [ENTREPRENEUR] for some time now and he is doing a startup called [STARTUP NAME] [URL]. They are beginning to see good traction ([ >25K ] signups to date) and their team has good product / engineering capabilities. You can check them out for 500startups, or even otherwise.
[ENTREPRENEUR]… Pankaj is a friend … you should sync up with him.
[MR. CONNECTOR 2]
Do you see a clear distinction between example 1 and 2
- Clear demonstration of connection strength: He clearly says that he has known “ENTREPRENEUR” for quite some time.
- Context: He may not explain the context but he gives me the name of the startup and gives me the info I need to look into the startup and do some research before taking the intro. He also indicates a potential fit with 500 Startups which is helpful for me.
- Traction: He gives me clear traction data points which I can draw my own conclusions from as well as indicative info about the product and engineering capabilities.
- Clear call to action: He gives the entrepreneur a clear call to act.
Based on this intro email, a dialogue has started between the entrepreneur and I. We are planning to meet soon.
What are some of the things you would recommend people think about when?
- Asking for an intro
- Making an intro
- Taking an intro
Leave your tips in the comments below.