8 ms·

I grossly underestimated the value of a warm intro in Silicon Valley before getting here, and still did before I started working for a VC firm. Coming in as an

I grossly underestimated the value of a warm intro in Silicon Valley before getting here, and still did before I started working for a VC firm. Coming in as an entrepreneur from smaller startup ecosystems in Boston & Europe, I was a bit puzzled by it — it seemed like unnecessary decorum or just a cheap ploy by VCs to maintain their inbox zero streak. Beyond the a16z process explained by Mr. Andreessen here, I should note that any third-party intro (to say nothing of a warm intro) will drastically enhance your chances at almost any firm even if they don’t require it. It’s a sign of hustle, diligence & genuine interest from entrepreneurs, even if the person that introduces you isn’t particularly warm about you or friendly with the partner in question. You’d be surprised how many founders fail to display that hustle/diligence/interest in discussions with VCs! I wouldn’t overthink the warm bit too much. Usually just by virtue of being willing to make the intro your contact will be warm and exude warmth. But I’ve also seen partner take intros from people they barely know/remember/trust if the pitch is compelling. Just make sure you stay connected to partners and potential connectors way ahead of time, and that they know you & your business. When the time comes, an intro will be a no-brainer.

minimaxir 10y ago
> I should note that any third-party intro (to say nothing of a warm intro) will drastically enhance your chances at almost any firm even if they don’t require it. It’s a sign of hustle, diligence & genuine interest from entrepreneurs The counterargument is that this attitude reinforces Silicon Valley as a non-meritocratic who-you-know culture instead of one that optimizes producing good products. (case in point, Andreessen's investment in Lucas Duplan/Clinkle) Many founders can't get that kind of access, often due to class or other systemic factors. It's not "hustle," and in my opinion, that attitude is an albatross on the startup ecosystem.
- nugget 10y ago
  You can still hustle from the edges inward, you just have to be a bit more creative about it. I probably can't hit up Marc directly but I bet I could find people who know him well enough to provide an intro but who aren't so well known themselves that they would ignore a cold call/email from me. Any firm you want to pitch has associates, secretaries, IT people, lawyers, and somebody who waters the plants, all of whom are there every day interacting with everybody else. It's a hustle-filter, not foolproof, not perfect, but efficient enough.
- timanglade 10y ago
  I’m not making any value judgement here about the system; in fact I’d probably agree with you that it’s not the most efficient it could be at funding the absolute best ideas from the absolute best people. I’m just saying, if you’re trying to get funding from Silicon Valley VCs today, this is how the game is played, for better or worse.
- gregpilling 10y ago
  Marc Andreesen will chat with you on Twitter. Short replies, but at least he notices. Be compelling, even if you are on the wrong side of the world.
  - minimaxir 10y ago
    That is not a good example of VC access since a) Andreessen quit Twitter a month ago and b) Andreessen is so infamous for blocking people on Twitter for having dissenting opinions that it was a meme. (http://money.cnn.com/2015/12/23/technology/marc-andreessen-block-twitter/ http://money.cnn.com/2015/12/23/technology/marc-andreessen-b...)
    - gregpilling 10y ago
      Fair enough. My exchange with him on twitter was minor and over a year ago. Other VCs are on twitter, as are people in their networks. I think that it is inauthentic to claim that there is no access to VC. You could reach them from the South Pole or anyplace that can get mobile data. The tough part is to stand out, not to get 5 seconds of time. in the video he says that they fund 20 out of 2000 warm introductions, and probably 20,000 cold ones. This challenge applies to all entrepreneurs though, those in San Jose and the South Pole. Only 20 will get chosen.
- tlb 10y ago
  Many seed-stage investors don't require introductions. For instance, most companies that YC funds were not introduced or previously known, they just submitted a compelling application. By the time a company is ready for series-A (where Andreessen invests), companies normally have a connection to someone (investors, customers, lawyers) who can make an intro. See http://www.paulgraham.com/fr.html http://www.paulgraham.com/fr.html under "Get introductions to investors" for some tactics. Angel investors have a huge incentive to find companies with good businesses but no VC connections, invest personally, and then introduce them to their VC contacts for further investment. (That huge incentive is a 10 - 1000x return on their investment). So there are quite a few people scouting for these opportunities. But I'd be curious to hear about examples where this doesn't work.
  - timanglade 10y ago
    It’s worth noting that a16z does invest at the seed stage — a lot actually http://a16z.com/portfolio/seed/ http://a16z.com/portfolio/seed/ although you certainly don’t have to get to them at that stage.
  - sage76 10y ago
    Someone correct me if I am wrong, but weren't some stats released a while back that said that 50% of the startups accepted by YC had been referred to them by the YC alumni network?
    - deleted 10y ago
      [deleted]
    - tlb 10y ago
      54.7% of accepted companies in the last batch did not have a recommendation. http://themacro.com/articles/2016/09/common-misconceptions-about-applying-to-yc/ http://themacro.com/articles/2016/09/common-misconceptions-a...
    - antaviana 10y ago
      It was not 50% but 45.3%
- jasode 10y ago
  >non-meritocratic who-you-know culture instead of one that optimizes producing good products. [...] To me, the "who-you-know" is not that difficult a bar. It's just basically playing the game of 6-degrees-of-Kevin-Bacon[1] in real life. The comments from tlb and nugget are ideas of how to do this. It does not mean you had to be one of Marc's classmates at the University of Illinois. >Many founders can't get that kind of access, often due to class or other systemic factors. I think this can be a point of good discussion. Can you list some of those impossible obstacles to networking into people like Marc? Which class of programmers writing apps for the internet or the mobile space can't get access to SV VCs? [1]https://en.wikipedia.org/wiki/Six_degrees_of_separation https://en.wikipedia.org/wiki/Six_degrees_of_separation
- mbesto 10y ago
  > The counterargument is that this attitude reinforces Silicon Valley as a non-meritocratic who-you-know culture Which largely manifests itself on the latter half of an investment cycle (i.e. now), and is less visible during the former when capital is constrained.
- graeme 10y ago
  I'm in Montreal, Canada, and could probably get a warm intro to Silicon Valley investors. I grew up in a small Canadian province, and my parents were middle class public servants. That's more privilege than some have, but it's hardly Ivy League and prep schools. I made connections by starting a business in Montreal and talking to other entrepreneurs. Eventually I met some who are 1-2 degrees away from Silicon Valley. I don't need investment for the work I do, but if I did I could try harder with my current network and make closer connections. There were zero entrepreneurs in my family. Though, one thing I'll grant is that Silicon Valley is probably a bad place to try things and meet people for a few years. Too expensive. Montreal is cheap.
- mathattack 10y ago
  I've seen this in other areas too. For instance, banking recruiting at top schools has this crazy process of facetime and attending dinners, and showing up to lots of events. Does it correlate with success? Possibly, but weak at best. But the banks need some kind of first filter. It's virtually impossible for a VC to take every proposal seriously. They need some kind of filter, and anything marginally better than "Read every tenth one that comes in" helps them out. Getting it via someone establishes reciprocity with the intermediary, and establishes that someone can find an intro. (This could be useful in selling)
lpolovets 10y ago
I think it depends on the recipient. For example, I'm a VC and I give ~0 weight to intros from people I don't know well. I get a lot of emails like: "Hey, remember how we met once at a demo day in 2014? Well my friend is raising for her company... do you want to talk to her? The pitch deck is attached." When I read that, I decide what to do based on the pitch deck, not the intro from someone I don't know. If someone cold emailed me with the same deck, I think I'd make the same decision.
downandout 10y ago
It's rather ironic that many of the most famous people in the VC industry actually publish their email addresses [1], and then those same people will refuse any deal that comes to them this way. It's almost as if these addresses are there to perpetuate the myth that Silicon Valley is open to all comers as long as they've made something great, when the reality is that it's only open to a tiny sliver of entrepreneurs with great networking skills and/or those that are Stanford students/alumni. [1] example: http://www.greylock.com/team/#reid-hoffman http://www.greylock.com/team/#reid-hoffman
vonnik 10y ago
Another way of thinking about the warm-intro suggestion is that most investors are overwhelmed with pitches and need a basic filter. Other expert humans are still the best filter they have. Which is kind of too bad, because all of those humans also face the same constraints on their time, network and expertise. While it may be far-fetched, it's interesting to think about how we might create a more automatic filter for startups that would surface those both of interest to the VC and with some chance of success, relying on self-reported data in Crunchbase and Angel List, biographical data about the founding team and its network, and maybe press and analyst reports about an industry.
graycat 10y ago
I tried to get interest in Silicon Valley for my project. I'm in NYS US. I tried a lot of advice on how to contact VCs. All my efforts were a huge waste of time. So, I got a lot of advice, about introductions, how to write a pitch deck, and more. As far as I can tell, all of that advice was nonsense and, for me, a big waste of time. Sure, I could get an introduction from one of my Ph.D. dissertation advisers, past president of one of the world's best research universities with one of the most famous computer science departments. But I doubt that many or any VCs know this guy personally and in that case I would have insulted my former dissertation adviser, the VC, and myself -- no thanks. Once I did get a warm introduction from the CIO of one of the world's most famous companies, very successful, and famous for a lot of use of technology. As far as I could tell, the warm introduction was, for the VC, just a throwaway. A waste for the CIO, the VC, and me. Bummer. Really, an introduction is the VC having others do part of the VCs work, and this should not be justified: E.g., some of the standard advice is to write a very short, general pitch deck, with only a few foils and only a few words per foil, with the only purpose being to get the VC interested enough to ask for more information. Well, if this is the purpose of the first contact, no way should I bother the president of a high end university or the CIO of a top company; instead, the VC can just glance at a few foils and words in a PDF file, type "Sounds good. I'm interested. Please send more." and hit Reply. To be more clear on what VCs are not responding to, my project is to get the world's best solution, much better than anything else, for a problem that is pressing for nearly all users of the Internet, in the US and around the world. So, some back of the envelope arithmetic is 5 ads per Web page 10 pages per usage $2 per 1000 ads displayed 2 * 10**9 usages per week 52 weeks a year 5 * 10 * 2 * 2 * 10**9 * 52 / 1000 = 10,400,000,000 dollars of revenue per year. Status: Production quality software -- from carefully designed, highly scalable software and server farm architecture -- written and running with no known problems, currently in alpha test. All that information above has been essentially ignored by essentially every well known VC firm in Silicon Valley. So, if that doesn't work, what does? Well, about all that is left is what is still promising but nearly never in the advice. So, here is what is left: Go ahead with the business. Go live. Get publicity, users, and revenue. Have significant traction growing rapidly. Wait for the VCs to contact you. Of course, I'm a solo founder, CEO, CTO, CIO, Software VP, all of the development team, Server Farm and Network VP, ..., janitor. So, by the time my company has traction significant and growing rapidly, if the project will work at all, then soon it should have plenty of revenue for rapid growth. If the growth happens, then there will be plenty of after tax earnings to make me financially successful. That is, the cost for me to run the server farm will fall quicly to less than 1% of revenue with 99+% of the revenue pre-tax earnings. One server from less than $1000 in parts should have the capacity to generate $200,000+ a month in revenue. For a solo founder, why then take equity funding? By the way, it's all safe for work, legal, ethical, squeaky clean, etc. Still, essentially no one on Sand Hill Road gives a sh_t. Okay: They have their ways of making money, and I have mine. Apparently we have nothing in common. Lesson: I no longer place much value on advice for how to contact VCs. Or, if they are at all interested, then they will contact you. If there is a mob of them on the front lawn waving stacks of $1000 dollar bills at you and screaming for you to take the money, then maybe open the door and otherwise call the police to have them run out of the neighborhood! That is, if you are a solo founder, then by the time they want you, you won't want them. So, what ARE the VCs looking for? How about young, naive founders, traction significant and growing rapidly, no earnings, five founders, all credit cards maxed out, each founder with a pregnant wife, and eager to sign any term sheet.

minimaxir 10y ago

> I should note that any third-party intro (to say nothing of a warm intro) will drastically enhance your chances at almost any firm even if they don’t require it. It’s a sign of hustle, diligence & genuine interest from entrepreneurs The counterargument is that this attitude reinforces Silicon Valley as a non-meritocratic who-you-know culture instead of one that optimizes producing good products. (case in point, Andreessen's investment in Lucas Duplan/Clinkle) Many founders can't get that kind of access, often due to class or other systemic factors. It's not "hustle," and in my opinion, that attitude is an albatross on the startup ecosystem.

nugget 10y ago
You can still hustle from the edges inward, you just have to be a bit more creative about it. I probably can't hit up Marc directly but I bet I could find people who know him well enough to provide an intro but who aren't so well known themselves that they would ignore a cold call/email from me. Any firm you want to pitch has associates, secretaries, IT people, lawyers, and somebody who waters the plants, all of whom are there every day interacting with everybody else. It's a hustle-filter, not foolproof, not perfect, but efficient enough.
timanglade 10y ago
I’m not making any value judgement here about the system; in fact I’d probably agree with you that it’s not the most efficient it could be at funding the absolute best ideas from the absolute best people. I’m just saying, if you’re trying to get funding from Silicon Valley VCs today, this is how the game is played, for better or worse.
gregpilling 10y ago
Marc Andreesen will chat with you on Twitter. Short replies, but at least he notices. Be compelling, even if you are on the wrong side of the world.
- minimaxir 10y ago
  That is not a good example of VC access since a) Andreessen quit Twitter a month ago and b) Andreessen is so infamous for blocking people on Twitter for having dissenting opinions that it was a meme. (http://money.cnn.com/2015/12/23/technology/marc-andreessen-block-twitter/ http://money.cnn.com/2015/12/23/technology/marc-andreessen-b...)
  - gregpilling 10y ago
    Fair enough. My exchange with him on twitter was minor and over a year ago. Other VCs are on twitter, as are people in their networks. I think that it is inauthentic to claim that there is no access to VC. You could reach them from the South Pole or anyplace that can get mobile data. The tough part is to stand out, not to get 5 seconds of time. in the video he says that they fund 20 out of 2000 warm introductions, and probably 20,000 cold ones. This challenge applies to all entrepreneurs though, those in San Jose and the South Pole. Only 20 will get chosen.
tlb 10y ago
Many seed-stage investors don't require introductions. For instance, most companies that YC funds were not introduced or previously known, they just submitted a compelling application. By the time a company is ready for series-A (where Andreessen invests), companies normally have a connection to someone (investors, customers, lawyers) who can make an intro. See http://www.paulgraham.com/fr.html http://www.paulgraham.com/fr.html under "Get introductions to investors" for some tactics. Angel investors have a huge incentive to find companies with good businesses but no VC connections, invest personally, and then introduce them to their VC contacts for further investment. (That huge incentive is a 10 - 1000x return on their investment). So there are quite a few people scouting for these opportunities. But I'd be curious to hear about examples where this doesn't work.
- timanglade 10y ago
  It’s worth noting that a16z does invest at the seed stage — a lot actually http://a16z.com/portfolio/seed/ http://a16z.com/portfolio/seed/ although you certainly don’t have to get to them at that stage.
- sage76 10y ago
  Someone correct me if I am wrong, but weren't some stats released a while back that said that 50% of the startups accepted by YC had been referred to them by the YC alumni network?
  - deleted 10y ago
    [deleted]
  - tlb 10y ago
    54.7% of accepted companies in the last batch did not have a recommendation. http://themacro.com/articles/2016/09/common-misconceptions-about-applying-to-yc/ http://themacro.com/articles/2016/09/common-misconceptions-a...
  - antaviana 10y ago
    It was not 50% but 45.3%
jasode 10y ago
>non-meritocratic who-you-know culture instead of one that optimizes producing good products. [...] To me, the "who-you-know" is not that difficult a bar. It's just basically playing the game of 6-degrees-of-Kevin-Bacon[1] in real life. The comments from tlb and nugget are ideas of how to do this. It does not mean you had to be one of Marc's classmates at the University of Illinois. >Many founders can't get that kind of access, often due to class or other systemic factors. I think this can be a point of good discussion. Can you list some of those impossible obstacles to networking into people like Marc? Which class of programmers writing apps for the internet or the mobile space can't get access to SV VCs? [1]https://en.wikipedia.org/wiki/Six_degrees_of_separation https://en.wikipedia.org/wiki/Six_degrees_of_separation
mbesto 10y ago
> The counterargument is that this attitude reinforces Silicon Valley as a non-meritocratic who-you-know culture Which largely manifests itself on the latter half of an investment cycle (i.e. now), and is less visible during the former when capital is constrained.
graeme 10y ago
I'm in Montreal, Canada, and could probably get a warm intro to Silicon Valley investors. I grew up in a small Canadian province, and my parents were middle class public servants. That's more privilege than some have, but it's hardly Ivy League and prep schools. I made connections by starting a business in Montreal and talking to other entrepreneurs. Eventually I met some who are 1-2 degrees away from Silicon Valley. I don't need investment for the work I do, but if I did I could try harder with my current network and make closer connections. There were zero entrepreneurs in my family. Though, one thing I'll grant is that Silicon Valley is probably a bad place to try things and meet people for a few years. Too expensive. Montreal is cheap.
mathattack 10y ago
I've seen this in other areas too. For instance, banking recruiting at top schools has this crazy process of facetime and attending dinners, and showing up to lots of events. Does it correlate with success? Possibly, but weak at best. But the banks need some kind of first filter. It's virtually impossible for a VC to take every proposal seriously. They need some kind of filter, and anything marginally better than "Read every tenth one that comes in" helps them out. Getting it via someone establishes reciprocity with the intermediary, and establishes that someone can find an intro. (This could be useful in selling)

lpolovets 10y ago

I think it depends on the recipient. For example, I'm a VC and I give ~0 weight to intros from people I don't know well. I get a lot of emails like: "Hey, remember how we met once at a demo day in 2014? Well my friend is raising for her company... do you want to talk to her? The pitch deck is attached." When I read that, I decide what to do based on the pitch deck, not the intro from someone I don't know. If someone cold emailed me with the same deck, I think I'd make the same decision.

downandout 10y ago

It's rather ironic that many of the most famous people in the VC industry actually publish their email addresses [1], and then those same people will refuse any deal that comes to them this way. It's almost as if these addresses are there to perpetuate the myth that Silicon Valley is open to all comers as long as they've made something great, when the reality is that it's only open to a tiny sliver of entrepreneurs with great networking skills and/or those that are Stanford students/alumni. [1] example: http://www.greylock.com/team/#reid-hoffman http://www.greylock.com/team/#reid-hoffman

vonnik 10y ago

Another way of thinking about the warm-intro suggestion is that most investors are overwhelmed with pitches and need a basic filter. Other expert humans are still the best filter they have. Which is kind of too bad, because all of those humans also face the same constraints on their time, network and expertise. While it may be far-fetched, it's interesting to think about how we might create a more automatic filter for startups that would surface those both of interest to the VC and with some chance of success, relying on self-reported data in Crunchbase and Angel List, biographical data about the founding team and its network, and maybe press and analyst reports about an industry.

graycat 10y ago

I tried to get interest in Silicon Valley for my project. I'm in NYS US. I tried a lot of advice on how to contact VCs. All my efforts were a huge waste of time. So, I got a lot of advice, about introductions, how to write a pitch deck, and more. As far as I can tell, all of that advice was nonsense and, for me, a big waste of time. Sure, I could get an introduction from one of my Ph.D. dissertation advisers, past president of one of the world's best research universities with one of the most famous computer science departments. But I doubt that many or any VCs know this guy personally and in that case I would have insulted my former dissertation adviser, the VC, and myself -- no thanks. Once I did get a warm introduction from the CIO of one of the world's most famous companies, very successful, and famous for a lot of use of technology. As far as I could tell, the warm introduction was, for the VC, just a throwaway. A waste for the CIO, the VC, and me. Bummer. Really, an introduction is the VC having others do part of the VCs work, and this should not be justified: E.g., some of the standard advice is to write a very short, general pitch deck, with only a few foils and only a few words per foil, with the only purpose being to get the VC interested enough to ask for more information. Well, if this is the purpose of the first contact, no way should I bother the president of a high end university or the CIO of a top company; instead, the VC can just glance at a few foils and words in a PDF file, type "Sounds good. I'm interested. Please send more." and hit Reply. To be more clear on what VCs are not responding to, my project is to get the world's best solution, much better than anything else, for a problem that is pressing for nearly all users of the Internet, in the US and around the world. So, some back of the envelope arithmetic is 5 ads per Web page 10 pages per usage $2 per 1000 ads displayed 2 * 10**9 usages per week 52 weeks a year 5 * 10 * 2 * 2 * 10**9 * 52 / 1000 = 10,400,000,000 dollars of revenue per year. Status: Production quality software -- from carefully designed, highly scalable software and server farm architecture -- written and running with no known problems, currently in alpha test. All that information above has been essentially ignored by essentially every well known VC firm in Silicon Valley. So, if that doesn't work, what does? Well, about all that is left is what is still promising but nearly never in the advice. So, here is what is left: Go ahead with the business. Go live. Get publicity, users, and revenue. Have significant traction growing rapidly. Wait for the VCs to contact you. Of course, I'm a solo founder, CEO, CTO, CIO, Software VP, all of the development team, Server Farm and Network VP, ..., janitor. So, by the time my company has traction significant and growing rapidly, if the project will work at all, then soon it should have plenty of revenue for rapid growth. If the growth happens, then there will be plenty of after tax earnings to make me financially successful. That is, the cost for me to run the server farm will fall quicly to less than 1% of revenue with 99+% of the revenue pre-tax earnings. One server from less than $1000 in parts should have the capacity to generate $200,000+ a month in revenue. For a solo founder, why then take equity funding? By the way, it's all safe for work, legal, ethical, squeaky clean, etc. Still, essentially no one on Sand Hill Road gives a sh_t. Okay: They have their ways of making money, and I have mine. Apparently we have nothing in common. Lesson: I no longer place much value on advice for how to contact VCs. Or, if they are at all interested, then they will contact you. If there is a mob of them on the front lawn waving stacks of $1000 dollar bills at you and screaming for you to take the money, then maybe open the door and otherwise call the police to have them run out of the neighborhood! That is, if you are a solo founder, then by the time they want you, you won't want them. So, what ARE the VCs looking for? How about young, naive founders, traction significant and growing rapidly, no earnings, five founders, all credit cards maxed out, each founder with a pregnant wife, and eager to sign any term sheet.