Why do you even need a double-opt-in-intro?
A reputation network driven by respect
In the last post, we covered how to structure a double-opt-in-introduction. This time around, I wanted to spend a little time on why you need one at all.
Venture capital, especially early stage venture capital, is a surprisingly manual business. For an industry that wants to be at the forefront of technological progress, there is surprisingly little actual technology in the business. Many (if not most) VCs run their business primarily out of their inbox.
At a certain level, this makes sense. Spending hours on statistical analysis of product metrics or quantitative sizing of the market is not a good use of time when the product is not built, the customers don’t exist, and the target market may shift.
What does exist, and is less likely to substantially change, is the calibre of the founding team. As such, VCs (especially early stage VCs) put a lot of weight on their assessment of the founders. Are the founders good leaders and will they be able to inspire the rest of the team? Will they be able to get customers, employees, and future investors on board for their mission? How technically strong is the founding team? Can they build teams and can they delegate? Are they the right team to attack this particular problem space? Do the founding members have complimentary skill sets?
A lot of this people analysis is qualitative, with a lack of good data. VCs rely on their network to provide additional information to make better decisions. Someone a VC knows implicitly vouching for you (by introducing you) is a stronger signal than the information in your cold email. Someone the VC respects vouching for your capabilities and your startup’s potential is an even better signal.
Getting a warm introduction from a respected source moves you to the top priority in the VC’s inbox. And some weeks, the VC might not get to Priority #2. The unfortunate side-effect of this process is that it reinforces access issues for minority groups and makes it difficult for a VC to build a diverse deal pipeline. I’ll add actionable steps to help you break through if you’re not connected to the network in a separate post.
OK, so we’ve covered the need for the introduction. But why does it need to be double-opt-in? This all seems like unnecessary work.
Well, it all comes back to the notion of respect and the lack of time. Introducing a founder to a VC, without the VC opting in to the introduction, is not respectful of the VC’s time.
If the VC is not interested in the introduction from the outset (perhaps they don’t invest in your geography, perhaps you are not at the right stage for their fund), the VC is left in an awkward situation of having to reject you without even having met you. Alternatively, the VC can go through the charade of lining up a meeting, only to waste your time and theirs when they inevitably decline to invest.
Wasting a VC’s time like this repeatedly damages the introducer’s reputation and ensures their future introductions won’t get to the top of priority list. It also associates the introducer with embarrassment, and word quickly gets around that dealing with this person is unpleasant. In a reputation driven ecosystem like Silicon Valley, very few successful people will be willing to pay that price.
OK, so now that we’ve covered why you need an intro and why it needs an opt-in from both sides (i.e. both you and the VC) but that still leaves the issue of why do you, the founder, need to send it in this format?
One again, we are going to come back to the issue of respecting people’s time. If VCs are using introductions as a first pass quality filter to sift through their overflowing inboxes, then it makes sense that introductions from certain parties will carry more weight than others (this person has sent me a deal in the past that turned in to a unicorn, that person is a global expert in a particular space, etc.). Those introducers, if you’re fortunate enough to know them, are going to be swamped with requests.
Providing your introducer with all the information they need to make the introduction (who you are, what your startup does, how big the problem you are solving is, why you want to talk to this particular VC at this particular firm) saves their time and safeguards their reputation as providing relevant, good quality potential deals.
In fact, an ideal double-opt-in-intro is one that can literally be forwarded to the VC with a “let me know if you’re interested”. Framing your request for an introduction in this way means your request is more likely to be actioned straight away and will have a surprisingly outsize impact in shortening your fundraising cycle.