Many people talk about the value of a warm introduction and how this can help founders rise above the background noise and capture the attention of influential people.
As an investor, one of the most important aspects of my role is to make these warm introductions to help a founder fast-track the growth of their startup. This might be potential customers, other founders, suppliers or advisers who can offer leads or expertise.
A referral from a trusted source, often the investor, gives a startup instant credibility with the third party, however, there are some ground rules to the art of introduction.
Firstly, a bad introduction is worse than no introduction at all.
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Phrases such as ‘I don’t know Julia well but …’ or ‘I actually haven’t met Julia …’ or ‘Julia is a friend of a friend’ does nothing to provide validation to the third party.
The key to successful outcomes from an introduction is the presence of trust, as both parties know and trust the referrer not to waste their time.
It is the founder’s responsibility to identify relationships that may prove beneficial and to identify the closest conduit to that person, rather than asking the introducer to open their black book or being passive and waiting for an offer.
Using LinkedIn is the easiest way for founders to see who investors know or to identify targets and then mutual contacts.
Founders should be upfront about telling the introducer exactly what they would like and avoid deluging them with pitch packs or sales documents. The founder should always provide a draft introduction for the introducer to reduce the burden for them after they have asked for the favour and introduction.
In drafting the introductions there are four important points founders should include.
1. The founder’s background to establish credibility
I am writing to introduce you to Julia and her new venture ‘MyChild’, a rapidly growing software business for preschools that allows parents to monitor their children’s wellbeing throughout the day. Julia has 10 years of experience running preschools and her new business is quickly expanding after recently securing contracts with the largest two childcare organisations in Australia.
2. Outline the skills of the third party and why they are relevant to the founder (flattery gets you everywhere!)
Julia, Bill has an unrivalled knowledge of the early childhood education sector, obtained over 20 years through his private equity investments. He has deep insights into growing businesses in the sector and his knowledge is well regarded by peers and sector leaders.
3. Be clear about the ‘ask’
Bill, I am hoping you might spare time for a quick call or coffee with Julia to share your experience in this sector and help Julia to identify organisations that may benefit from the product she has developed.
4. Clearly outline the benefit for the third party
Bill, I have also suggested to Julia that there may be funding opportunities when this business is at a more advanced stage. I have great confidence in Julia and see a very bright future for MyChild as the first provider of this technology solution in the global market.
Once the email has been sent by the investor, a follow-up should be sent by the founder on the same day to thank the founder and suggest next steps with the third party.
Bill, it’s great to meet you. As Ben mentioned, I would be grateful for a quick coffee, or even a call to discuss our mutual interest in the early childhood sector as I have heard impressive things about you and your expertise. Please let me know when it would be convenient to connect in person or via phone.
Many doors, fewer opens
What happens if Bill isn’t as responsive as Julia might hope?
A quick follow-up email within a week to check whether they have received the email is appropriate. Failing a response to that email, a second attempt to connect via phone might prove more fruitful.
A lack of response isn’t necessarily a bad omen, so it is worth persevering.
If subsequent attempts still prove futile it is worth letting the introducer know their introduction wasn’t successful as a courtesy and thanking them for their efforts.
Most founders will knock on many doors in their startup journey and will not expect every door to open.
Perseverance is key to unlocking opportunity and founders who grow their network widely give themselves a better chance of connecting with those who can assist in taking their startup to the next level.