Why You Have to Build Relationships Before You Can Lean on Them
Many of my friends and I received a fair amount of emails which are variations of “Hi, we met at event X. I am fundraising. Can you introduce me to some VCs in your network?”
These emails always intrigue me. Why does the other person think it is in my interest to leverage my social capital to help them when we don’t have a relationship to begin with? And on an even more basic level: Why would I spend time (of which I have little to none) doing this?
Which brings me to the core of the argument: You need to invest into your relationships. The age-old truism in the VC world is that you start building your relationships with potential funders long before you ask them for money. Nobody likes to be seen and treated solely as a transaction — and VCs notoriously invest into people, not companies or products. And for a VC to invest into a person, they need to have a relationship.
Some might ask themselves: “That is all nice and well, but how do I approach a VC if I have no specific ask? Why would they meet with me? What are we going to even talk about?”
Here’s the thing: If you do something which is genuinely interesting to a VC, most of them will meet with you — VCs love to learn what’s happening in the market. And for VCs the above is also true: They like to build relationships before they invest. It de-risks their investment decisions. And if you can’t get to meet with a VC — meet with the people who end up making referrals for VCs.
But note — you do this before you even think about fundraising. Which means that you have to give before you take.
And trust me — it works. Over the years I have helped dozens of companies raise tens to hundreds of millions of dollars. And each of the founders I helped I consider a friend.