Startup Introduction Risk

“George, dude, can you introduce me? 

I have little experience with raising money. I had done it only once, for a startup that we had shutdown and later restarted with the remaining capital. Yet, I am often asked to help with fundraising. I love helping.

After talking to many entrepreneurs, a common theme emerges. The theme is best illustrated by this incident from a few days ago.

Someone I studied with at the university 20 years ago, whom I have not seen afterwards, recently asked me this question (paraphrased from German):

While other similar requests aren’t coming in such a familiar form (which I don’t mind), they do share a common trait: I don’t/barely know them and they ask me to introduce them to local big shots.

Let me clarify that I’ve never met Mr/Mrs Big Shot and if it’s any indication, they doesn’t follow me on Social Media. However, I often do know the person I’m asked to bridge to. Yet, for me to introduce you to anyone, I first must know you well. So I can vouch for you. In no other circumstances I can make an introduction. Regardless how cool your project is.

So… 10 years ago I was assembling PCs at a computer store in Darmstadt, Germany. A guy I knew from playing basketball told me he was looking for a job. So I spoke with another guy I knew, and I brought him in for an interview and he started working shortly afterwards.

After about two weeks, he didn’t show up to work one day. And then the next day. And I didn’t see him anymore. He vanished. I wasn’t responsible for it, yet, it forever stained my ability to recommend new recruits to the store. And the store owner was never shy reminding me of it.

Funny side note: I ran into the guy ten years later at a party in Houston, Texas. Where he explained that his family made a sudden move to America a few weeks after he had started working at the store.

We laughed at it and we’re close friends ever since. He is an awesome guy. But back then, he screwed me over while teaching me a valuable lesson.

“You are always taking a risk when making an introduction. If the intro is a waste of time, it’ll affect your own reputation, putting your social capital at risk. Do it too often and you are out of the networking game.”

The only way to mitigate that risk is to know both parties well to ensure it is indeed a valuable match.

Another thing at the early phase of your project, everything depends on you, the founder. Nothing else matters. Your pitch deck isn’t enough to assess your ethics, commitment, your ability to attract talent, lead the team or handle a crisis.

You can not showcase these skills in a 30 minutes Skype call. Your self-selling statements peppered with todays’ buzzwords won’t establish your credibility.

“I’m a future thinking kinda guy, building a VR enabling IoT. Main focus is AI based on deep learning of big data”

It often just does the exact opposite.

Lesson I learned, if I cannot vouch for you, what do you want me to say? Here is a dude I met, and he is working on a cool project? What do you think Mr/Mrs Big Shot will do? Drop everything and call you? What do you think it will do to my credibility as a connector?

However, if you do possess the above qualities, plenty of people should be able to attest to it. Those are the people in your network, people you worked with before. Only they can make meaningful and valuable intros for you. Everything else is noise. Asking a random person to introduce you is asking them to add more noise to a system of already low signal-to-noise ratio.

And if someone agrees to introduce you without writing two meaningful paragraphs about you, then chances are, you won’t see any benefit from that intro. As their intros are rarely taken seriously anyways.

What I’m saying bruh research the person you looking to be introduced to. Then, find the best person in your network that can connect the dots for you. The connector should already know you well, so don’t sell yourself. Instead, sell them the benefits both sides may reap in case of a successful match. Your connector will be happy to take the credit for a great match and gladly intro you.

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