Conventional wisdom says that the best way to meet with a venture capitalist is to get a warm introduction. (While it’s a good rule of thumb, it’s not entirely true, which I’ve blogged about previously.)
However, there’s another way that I’ve seen entrepreneurs use mutual connections that’s even more impactful than a warm introduction: a proactive inbound reference. Rather than wait for a VC to ask for references later in the diligence process, savvy entrepreneurs have had people in our mutual network lob in an email or phone call as a vote of confidence and support. If a person is merely on a reference list after the first couple meetings, the standard expectation of course is that she is going to say good things about the entrepreneur. But a strong inbound reference from the same person can be even more productive. Inside our partnership here at NextView, we informally and affectionately refer to it as “playing the ground game.” When executed well, it can successfully get us to pay particular attention to and instill additional confidence in a Founder.
Tactical thoughts to having good ground game:
- The person lobbing in support needs to not only be a mutual connection, but rather be truly trusted by the VC… a much higher bar. Again, otherwise, there’s risk in having the opposite effect, from merely noise to a negative signal on how you judged the relationship’s effect.
- The inbound reference must say superlative things, not just positive ones. It’s a subtle, but impactful difference. “He’s good – I’ve worked with him” isn’t as effective. Because it’s going further than merely offering to be a reference, and instead they’re inbound, it’s incumbent that entrepreneurs absolutely believe that they’re going to be over-the-top good.
- One or two inbound calls of support can make a positive impression, but more than that can have the opposite effect. Too many can come off that an entrepreneur is trying too hard, signaling that there isn’t enough substance to their pitch itself to stand on its own.
- There’s an art to the timing of these calls and/or emails. The best strategy is a Goldilocks one timing: not too early (overwhelming) and not too late (less influential to outcome). This point is especially true if the inbound reference is directed towards another partner at the firm who isn’t the primary point person on the potential investment.
If, as an entrepreneur, you have more than one strong mutual connection with a VC, don’t overlook an arrow in your quiver which you may not have realized that you already have. Good ground game can be the subtle edge that pushes the financing process forward faster because an especially strong opinion from a trusted contact is a meaningful signal. But at the end of the day, it’s merely a minor tactic which shouldn’t distract from the fundamental key to a successful fundraising process – clearly communicating the opportunity of the business.