The key takeaway - “relationship building is a cumulative process.”
All three agreed that their best deals are always with great people that they’d built a relationship with prior to making an investment decision.
I think a lot of young entrepreneurs - this one anyway - get fearful of their use of an investor’s time and try to get right to the pot of gold at the end of their startup rainbow.
I remember early meetings with angels - one with Roger himself actually - when I evangelized my cofounders and I as the best team on the face of the planet, showed our market as the biggest industry ripe for disruption, and I had a bulletproof plan for how to make it all happen.
All good right?
Sure… if Roger had known me for more than 10 minutes.
But even if he did there’s an issue - if we’ve got it all figured out, what’s the point of connecting with Roger? He’s not an ATM, so why make it transactional?
Sure, we’ve all heard of startups that pitch at an event and close investors over one drink, but I guarantee they don’t get nearly the kind of advice and support that the best entrepreneurs receive from these truly supportive investors. Howard Lindzon made two excellent points on this.
- “Money is a commodity, so don’t take money from people who don’t add value”
- ‘Integrity is really important. Expose your faults to show where an investor can add value.’
Investors want to invest in lines, not dots, which means you need to get to know them early and build a real relationship so they can draw a line from dot to dot that is trending high and to the right.
It takes time and it can sometimes feel distracting, but I guarantee it’s worth it. Howard L. summed it up nicely, “Make deposits everyday.”