How To Build A Network That Builds You
Hey 👋 - Yoann here.
This is the 1st issue of The Saturday Climate Insider.
Each Saturday, I send out 1 actionable tip on how to accelerate the growth of your Climate Tech startup or fund.
Each tip can be read in less than 4 min.
No spam, only actionable and high value Climate Tech stuff… I will never sell you anything nor “sell” your information, for any reason.
Enjoy!
It’s the good old pitch: “A warm introduction is always better than a cold call.” This is especially true in venture capital. To be a successful VC and attract high-quality deal flow, you must invest the bulk of your relationship-building efforts into establishing a network of professionals to refer deals to you.
Any seasoned VC knows your network is your biggest asset. A strong reputation, coupled with a robust network will lead to higher-quality deal flow and ultimately make your job as a VC a whole lot easier.
In fact, it’s estimated that VCs source up to 80% of their deal flow through referrals from their networks.
After all, what can they really learn from one cold email? There is no tone, no body language, and it makes it very difficult for VCs to get a sense of whether or not the founders are the real deal.
A good VC firm will invest the bulk of its relationship-building efforts into establishing a network of professionals to refer deals to them. This network might consist of other venture capitalists, angel investors, accelerators, entrepreneurs, lawyers, and various other members of the tech ecosystem.
A venture capital firm’s primary resource (other than their dry capital) is the time of their investment professionals; time saved in finding deals means more thorough diligence and higher quality assistance to portfolio companies.
Additionally, looking for leads is always easier if you know the people sending them to you. These people likely do some of their own screening before sending them your way because their own reputation is on the line. This pre-screening makes referral deal flow better in quality than other sources.
This means that as a VC you should be hosting and attending events, and having regular catch-ups with key connections.
Any seasoned investor will tell you that if you are spending all of your time at your desk you’re doing something wrong. That’s why you often see VCs at events, conferences, or grabbing cocktails at the bar after work. They aren’t just out for a drink or in the mood to socialize. There is a method to the deal flow madness.
While there are thousands of startups out there, very few have what it takes to be the winner in your portfolio. Most of them will fail. The job of a VC is to sift through the hundreds of startups and elevator pitches to find that diamond in the rough.
So if you want to build a quality deal flow pipeline, get out in the community, be personable, listen to founders, and truly try to help founders. If startups and other VCs see you out there offering your support, you will likely develop a strong reputation among your peers, who will remember you the next time they meet a startup in need.
If enough people know and trust you, the startups will follow suit because there’s a good chance they have some kind of connection with the person that connected you. That immediately gives you a leg up.
Key tip: your network can be your biggest asset. A strong reputation, coupled with a robust network will lead to higher-quality deal flow and ultimately make your job as a VC a whole lot easier.
Solution: we want to help you develop your world class Climate Tech network.
With Climate Insiders, we plan to host exclusive in person events with all the guests of the show and the Who's Who in Climate Tech.
On top of that, we want to involve YOU more closely, as part of our early followers and develop stronger ties.
I’d love to collect your thoughts, insights and ideas on how to best leverage this network for your own needs.
What would you like to get from this community? What's the best format to engage with you on a more regular basis? Email me your thoughts. I read every single message.
That's all for this Saturday. 1 simple tip in less than 4 minutes.
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See you again next week.
Cheers,
Yoann
With Climate 💚