We’ve already written about how to go about building relationships with the right VC ecosystem partners. In this post, we’ll break down why it’s important to spend the time and do this.
Here are four of the main reasons we encourage everybody working in venture to invest in their partner network.
All VCs have the benefit of seeing thousands of businesses per year. The more you see, the more you can pattern match and give thoughts on why or why not a new business is worth betting on.
Every investor has their own niche zone of genius, and the more investors you speak with, the more you can tap into the insights they’ve gathered.
This can give you more coverage and knowledge areas instead of having to go deep on a million different concepts yourself. Instead, you’re able to borrow their brains and pull out curated opinions from people that know more than you.
Pro tip: Check out our top podcast takeaways and our investor deep dives for more actionable advice.
If you expect to win the best deals in venture capital, you can’t do it by yourself.
The best venture funds operate with an unfair advantage. They leverage informational asymmetries, and they trade on information that is unavailable to others.
This is legalized insider trading, and if you aren’t doing it, you’re losing.
The question then becomes, “how can I get better information?”. The answer is simple: you have to find your tribe of other investors.
We’ve found the best deals are usually shared first with friends, then everybody else.
Find other people at similar stages as you (analysts, associates, principals, etc.). Meet as many of them as possible, see who you vibe with, and figure out ways to keep in touch. The easiest way to keep in touch is to share deals you like with them. Have a high quality bar so they don’t start tuning you out.
You’ll find that the more you do this, the more opportunities seem to come back to you. The law of reciprocity applies to most things, and venture capital runs on it.
We built Confluence to give investors information advantages. Apply here if you want to join 1,800+ other investors already making the most of those advantages.
There are plenty of other places to look for deal flow if you want to expand your sources beyond other investors. Here are a few examples of other partner networks you can find good companies from:
Venture, both for funds and individuals, is a branding game. The more people you meet, the more you get your name out there.
Most investors we know only focus on meeting three types of people:
Meeting other ecosystem folks aren’t as high of a priority, but it can pay dividends to be connected in different pockets of the venture world.
These people see and meet with plenty of people. If you’re able to find a way into these groups, you can be one of their first calls when they meet with a company worth talking to.
Relationships matter, and building them with the right people is crucial if you plan on staying around in VC.
This post highlights some of the reasons why that’s the case. Whether you plan on doing it to gain valuable insights and industry expertise, increase collaboration and co-investment opportunities, leverage partner networks for deal flow, or enhance credibility and reputation within the industry, this post provides more detail on each.
Hopefully you’re able to take something valuable from here and apply it to your investing career.
