Are Long Term Relationships the Key to FUNDING?
With nearly endless books, workshops and talks about how to get your new idea funded, it is hard to clear through all the noise to figure out what to do. I decided to go to a Funding Post event with a Venture Capital and Angel Roundtable at the Bingham Law Office in Los Angeles. There was a panel of featured speakers, a pitch competition and networking directly with local early-stage Angel Investors and Venture Capitalists. I realized the advice I have been giving my students and clients for years about being kind and developing relationships is still the golden ticket.
As I listened to the panelists speak, many shared a nugget about how their priority is to find the right match. Cameron Casey (M7lab), believes the most important factor is finding someone that you can work with and who is coachable. Many people search for money or mentoring and forget to build a foundation before asking for financing.
Similar advice of always be networking and search for all types of people including other entrepreneurs, investors, and bankers was heard from Stephen Block (K5 Venture Partners). I agree that you never know how the people you meet will turn into your top team. I once went to Koh Samui because of a tweet from a fellow travel blogger. I met one of her roommates who has now been my tech wizard for two years. I did not have that island on my trip plan but followed my instincts and found someone who has changed the course of my website and business. Block shared a truth that: “People invest with friends, the ones they know.” While you are out at events or traveling the planet, you just might find the person who holds the key to your next step.
After thirty years of investment experience, Mary Coughlin, founder and Chief Investment Officer of Barnegat Bay Capital Management, says early meetings are always about getting to know people. “If there is a future fit we might work together but even if we don’t, each of us is enriched in some way for having connected.” Often potential partners are sizing each other up from minute one to see if a deal can happen but Coughlin suggests remembering “that long term relationships are imperative” and being willing to devote the time it takes to develop them is essential.
I personally consider myself a networking ninja and collect interesting people everywhere I go. I felt that Marcus O. Filipovich (The Design Accelerator) summed up the theme of relationship building, when he said: “People invest in people that they like. The funding relationship has elements of a marriage. You need to hit it off.” A business relationship is like all the other relationships in your life. They all need time, care and consistency.
Many people want to create a winning company. In Kidding Ourselves: The Hidden Power of Self-Deception, Joseph Hallinan explains that: “We are what psychologists like to call “risk optimists’..sticking with something helps. It leads to optimism, which leads to perseverance, which leads to success.” It is crucial to believe in yourself and build connections over time.
One aspect that is sometimes forgotten in the pursuit of the perfect match is to be discriminating. Tom Nicholson (ARC Angel Fund) agrees that it is all about the associations. “Start them and keep them. You need to have good chemistry and an idea. Pursue connections and evaluate the investors as much as they are evaluating you.” Often in search of the deal, entrepreneurs forget to evaluate if it is meeting their needs. Both sides have to be gaining advantage for a true partnership to survive.
In Nothing Changes Until You Do: A Guide to Self-Compassion and Getting Out of Your Own Way, Mike Robbins says:
Too often in life, we unnecessarily overcomplicate things. As Woody Allen famously said, “Eighty percent of life is just showing up.” I think he’s right and that’s true whether we’re giving a speech, going out on a first date, having an important meeting at work, playing with our kids, trying something new, working on a creative project, or doing just about anything in life—big or small.
Sometimes in the search for the perfect way to make a deal or get funded we forget the basics. As Wayne Gretzky famously said, “You miss 100 percent of the shots you never take.” Show up, have integrity and believe in yourself and your company.
As Robbins says in Nothing Changes Until You Do: “Focus your attention on three things—have your attitude be as positive as it can be, your effort as passionate as possible, and your perspective as healthy as you’re able, then you can be a productive member of this…team…Remembering these things will help you engage effectively in anything that happens.”
TEN STEPS To SUCCESS from Betsy Flanagan, Founder & CEO, WorkStrengths
1. Go to networking events & track who you meet. Keep a spreadsheet with their information and short notes about what you talked about so you can refer to it later (e.g. their latest project, what they are excited about/focused on) OR if you connect on LinkedIn you can put this in the notes section. This is great because you never know in your 45+ year career when your paths may cross again!
2. Look for similarities with others and highlight them (oh, I see you are from Maryland too, or I also went to Harvard, or I saw you mentioned yoga in your twitter feed — I teach yoga… but of course — don’t look like a stalker!).
3. Appear competent — ask good questions! This requires doing your homework.
4. Dress the part, don’t slouch and watch your body language. over 60% of communication is non-verbal.
5. Follow up with the people you meet: go to coffee, talk on the phone, send some emails. Smart people like to meet other smart people! Make sure your emails to them, phone call or coffee is time well spent. Emails should be short and to the point. Do not make it all about you and do your homework — don’t ask questions that you can easily google the answer to.
6. Find ways to be helpful to the people you meet at these events and others in your network. Give back — think/see if there is something you can help them with (e.g. if you are social media expert — take a look at their social media and see if you could offer suggestions for improvement — but do this tactfully. don’t come across as know it all). Or consider volunteering some time to help them with a project, or sending them information that may be valuable to them.
7. Build a network of people who you can regularly ask questions, get advice and learn from.
8. Use your connections — school, friends, family, past coworkers, professional organizations, sports teammates, contacts you make volunteering, social media connections and make your dreams come true
9. If you are a student — take advantage of this! People LOVE to help students and are generally happy to chat for 15 minutes or go to coffee. But don’t ask for a lot of time. Keep your ask short (15–20 min call or coffee).
10. Be strategic — in who you reach out to, who you invest in (who you volunteer your time for, etc. Time is a valuable and scarce resource).
About the Author: Lisa Ellen Niver is a is a passionate writer, educator, social media expert, speaker and global citizen who has traveled to over one hundred countries and six continents. She writes for Wharton Business Magazine and founded the top 100 Travel Site, We Said Go Travel.