Definition Networking is the art of building mutually beneficial relationships, usually with the goals of developing ideas and furthering one’s career. A network can be an established group of people or organizations that an individual seeks to become a part of, or it can be something an individual builds. A network might be based on similar experiences its members have in common, or their similar backgrounds; they might face the same challenges, or possess similar attitudes or affinities.
When most people think of networking, they think of awkward meetups, guys in terrible suits gathering business cards at a badly lit conference, and LinkedIn. Yes, it can be these things. But network is another word for community. It’s all about relationships. Whether you’re trying to start a relationship with an investor, a sales lead, a potential mentor, or a peer you can bounce ideas off of, think of networking like a friend introducing you to their other friends. To build the network that will help you start, grow, and launch your company successfully, you just need to make a single connection.
What Makes a Great Networker?
Some people are naturally good at making connections and building trust. Some were lucky enough to have had a family member, teacher, or boss who introduced them to networks of influential people early in their career. But most great networkers are great because they’ve practiced. Learning how to get the right meeting with the right person is absolutely a skill, and if it turns you off or scares you now, know that you can improve the more you try and fail and try again.
Founders in Silicon Valley—the capital of venture capital and the center of the startup ecosystem—rely on networking, and it’s hard to overstate the importance of building relationships for those who want to create a successful business. This is true for venture capitalists as well. It’s a place where, according to venture capitalist Brianne Kimmel, “a cold email and a coffee can totally change your life.” The complicated topic merits an entire Guide, and we hope to provide that one day, but for now we offer a few points every entrepreneur should take to heart about the nature of networking—especially when it comes to raising venture capital.
New entrants to Silicon Valley may be surprised to find that many people go out of their way to help each other—especially new founders—without expectation of getting anything in return. A well-known camaraderie exists between individuals who have made the radical decision to forgo a lot of the trimmings of a “normal” life; many founders try to pay back the help they’ve gotten along the way by helping others. Venture capitalists also act as mentors to founders, and strategy meetings over beers are not uncommon. To many, the power of the network is one of the most welcome and unique characteristics of the startup world.
One thing to be aware of is a general split between what John Doerr (investor in Amazon, Google, Intuit, and more) calls missionaries and mercenaries. Some entrepreneurs, VCs, and employees are missionaries. They do their work because they believe in it.
On the other hand, there are the mercenaries. People who take from others and take advantage of others, who are not mission-driven. Some of these people are just a waste of your time; others are dangerous. The rest of this section should help you develop a filter to build relationships with the people who will encourage, support, and challenge you, and hopefully avoid those who will, knowingly or unknowingly, do harm.
The Long Game
Founders have to put in work. That work can take years. You may be reading this and realize you have a long way ahead of you. If you’re just getting started on your great idea, it might be three or four years before you raise your first meaningful VC round.
Some people, by nature of privilege, will be able to make all of this look easy. Others are navigating a minefield of bias and discrimination. Remember that when it comes to venture capital, everyone on the inside was once, to one degree or another, on the outside, and anyone who wants to be meaningfully involved in the world of innovative businesses needs to play the long game. No one is entitled to a network of investors. Many professional relationships are the fruit of years of research and labor. Entrepreneurs must be relentless, and you will learn to see obstacles as invitations. (Did you know that Amazon was originally called Relentless? In fact, relentless.com still redirects to Amazon.)
Some of this starts way before you’re actually ready to raise a round. Some of it is about direct action on your part, some is about reading and listening, learning by osmosis. There is no silver bullet. You need to be a very patient sponge.
If you’re careful, courteous, and move slowly, you will build a powerful network of investors, some of whom just might invest in the company you’re working on right now. Others might invest in your next company, or become mentors, allies, advocates, or friends. Any one of the investors you connect with now could be in your life for the next 20 years or more. The strategies in this section will not only help you raise venture capital, but help you build relationships that will last.
Networking as it relates to venture capital is particularly important for a few reasons. Once they’ve invested, an investor and a founder will build a relationship for years, sometimes a decade or more. Building trust and a relationship before an investment is made is part of the VC ethos. VCs want to see that founders have the grit and the drive to network their way to customers, into the best candidate pools, and into later-stage investors. Venture capital is a people business, and VCs take the networks they’ve built very seriously.
Relationships take time to build. Most people don’t get married after one date. Thus, good relationships are “lines, not dots,” as Mark Suster wrote on his blog, Both Sides of the Table. This is a crucial idea that you’ll hear referenced a lot, so we highly suggest reading the whole post.
While you are building your relationship, you want to be able to show an investor how you have progressed, your upward trajectory. But what progress means can vary. Like it or not, every coffee meeting you setup with a VC is effectively a pitch meeting. There aren’t truly casual coffee meetings; a VC will be evaluating whether you and your business are making good progress at every dot along the line.
Building relationships is a particular challenge in raising venture capital because the ecosystem is in constant flux. Investors who invest at one stage or sector one year can invest at completely different stages and in different sectors the next. During some periods, venture capital has been easier to raise than others. New investors and types of capital are always coming on the scene.