It’s difficult to fully describe the importance of introductions within the game of early- stage fundraising to someone who hasn’t been a professional investor. In short, when you’re on the inside and see how the sausage is made, you gain an appreciation for how little hard data investors have to base investment decisions on. Fairly subjective factors like how a VC first discovers an opportunity becomes incredibly influential. Was it a cold, unsolicited email or did a trusted friend share the deal?
While VCs do invest in deals that reach them via cold outreach, the vast majority of investments are made in companies that are shared via warm introduction.
This stark contrast in outcomes makes concentrating on generating introductions to target investors crucial to a strong fundraise. There are many components of introductions in fundraising that I could write an essay on, but here I’ll focus on the importance of understanding 2 types of intros.
The most common advice given to founders about how to ask for introductions is to make it easy for the person making the introduction (“the connector”). Usually this means providing a blurb and/or a forwardable email to send to the target investor. That’s just table stakes though. You can really optimize outcomes when you begin to understand there are 2 types of intros.
A Type 1 intro happens when a connector needs to spend social capital to make the introduction happen. They sound like this:
Hi, [INVESTOR] - there’s a really great company that does [BLURB]. I’d love for you to meet with them. Can I make the introduction, please?
Intro requests like these often fail to convert because the investor isn’t give a good enough reason. Sometimes requests like these don’t happen at all because the connector doesn’t want to even try spending the social capital!
A Type 2 intro is one that feels like the connector is doing the investor a favor (very reminiscent of the “be chased” mentality for founders). They sound more like this:
Hey, [INVESTOR] - I just chatted with the CEO of [COMPANY]. They might be raising soon. CEO told me they just [EXCITING POINT 1], [EXCITING POINT 2], [EXCITING POINT 3] and already have [AWESOME INVESTOR] on board.
Feels like a great fit for what you look at. Should I connect you?
Whether it’s through a more detailed blurb, coaching the connector on what to say/write, or just focusing on delivering real progress in your business… your goal should be to make it as easy as possible for connectors to make Type 2 intros. Intros that connectors will be eager to make and will tell Investors, “Thank me later…”