Networking – To interact or engage in informal communication with other for mutual assistance or support (from Dictionary.com) I talked about networking in my recent post on How to become a venture capitalist. In it I said that I’d put up a separate post with more detailed thoughts on the subject. I don’t pretend to be the final source on the matter, but I do regularly engage in the art of networking – on both the network-ing and network-ed side of the equation. As with all my posts, comments are welcomed (and appreciated). Sorry in advance for the length of this one – I tried cutting it down, but couldn’t get it to work that way . . . Step 1: Make your list. Good networking starts with knowing who you want to meet – or at least what type of people you want to get in touch with. This can be specific (for example all of the VC’s in town when you are trying to land a VC job) or more general (your peers at other local businesses; CEOs of businesses in a certain industry; all of the patent attorney’s in some market; etc). Either way do some research and make yourself a list of people you want to meet. WRITE IT DOWN. This isn’t a mental list – this is a real list of people you want to get in touch with. Step 2: Exercise your existing network. You know people. They all know people. There is an entire industry that is trying to take advantage of this on-line. Here’s where you need a second list – write down all of the people that you know (i.e., who would return an e-mail and could vouch for you to someone else) who you think could put you either directly in touch with, or one step closer to the people on your first list. Now contact them in a personal and relevant way and ask for their help. Be specific about what you are asking for (i.e., give them names if possible andplenty of background on why you are asking for help and what you are trying to accomplish). As you get introductions, track where they came from. Your lists should start to merge and you should develop something that looks like a network map showing linkages between the people you know and the people you are trying to meet (the more linkages the better). TRACK INFORMATION. This isn’t a time to rely on your memory. Be anal about writing down who is introducing you to whom, any contextual information you gather and any background you have on the people you are trying to meet with. Step 3: Be specific & structure your meetings. Most people generally manage some form of Steps 1 and 2 in their networking efforts – even if they are not being as careful as I’d like about documenting their work. Step 3 is where people make what I think is the second most common mistake in networking: when they finally get a meeting with someone they are looking to network with they aren’t specific about what they want. I hate meetings like this. They generally include statements like “I’m not really sure what I’m looking to do,” or “I’ve got a very broad background and could fit in a bunch of different places,” or “What kind of investments does Mobius make,” or my personal favorite: “I’d like to do something more entrepreneurial.” Not helpful. At all. Do your homework on who you are meeting with. Be specific about what you are looking to do. Have a story to tell and make sure it’s relevant to the person you are talking with. If you are asking for help/advice on something open ended make sure that is part of the context of setting up the meeting (its ok to network for the purpose of figuring out what you want to do with your life, but be clear about your intent and be specific about the ways in which the person you are talking with can be helpful). The corollary to being specific is structuring your networking interactions well. Good networkers are adept at guiding networking meetings in a way that drives the results they are looking for. Whether you are talking to someone at a cocktail party or sitting in their office – know how you want the interaction to go and guide the discussion. Step 4: Take good notes. This is pretty obvious, but I’m amazed at how often I meet with people who don’t write anything down in our meetings. When I’m networking with someone I take careful notes – first, because it shows that I’m interested in and respect what the other person is saying and second because I want to keep a record of what we talked about and specific ideas for follow-up. When its awkward to take notes directly (for instance at a social event), I try to write down information after a conversation has ended – preferably on the back of the business card I just received, but at least on a notepad (which you should always carry along with a pen to any networking event). Steps 5 & 6: Plan your follow up . . . and actually follow up. These next two steps are where people really fall down – they would make for a lengthy post by themselves. By follow-up I’m not talking about the e-mail you send out the day after meeting with someone thanking them for the meeting, telling them how much you enjoyed talking with them and appreciate their perspective, attaching your CV (or pointing them to your blog <g>), etc. I’m talking about the ongoing communication you have with people. If you’re driving for a specific outcome this can be very structured (i.e., putting reminders in your calendar with specific things you plan to follow up with) – less so if you are engaging in more general networking. Either way, you need to make a plan for how you want to follow up with people and do so. It starts with Step 4 and the natural follow-up to step 4, which is putting this information in some form that is searchable and usable (perhaps a spreadsheet or database if you are networking for a specific outcome, since you’ll be referencing it often, but also potentially notes in your contacts or somewhere else that you store information, but in a way that you can easily separate out people that you are trying to stay in touch with in this way). Remember that networking is a two way street. Good networking is about staying in touch in a relevant way. Sending an e-mail every month asking if any new positions have come open is a bad example of this. Seeing something in the news or an article of interest that you send along to someone with your thoughts is a good example of this. See a person you know in the news – send a note congratulating them on their recent success. Notice that a VC you’ve talked with has just made a new investment – send a note. Find an article that you think would be relevant to that CEO you met with a few months ago – send it along. The idea is to stay top of mind, but in a way that is relevant to the people you are interacting with. Don’t forget to give context in your e-mail (i.e., “Sally – We met two months ago at the xyz event – John Smith introduced us . . . ). I can’t emphasize these steps enough. I can’t believe the number of meetings I have that end with the end of the meeting or a short follow-up note. Even if there were specific follow-up items. People fall down on follow-up and I think expect that they can pop in and out of someone’s network as the need arises. You just accomplished what may be the hardest part of networking (getting a meeting in the first place; grabbing someone’s attention at a party; etc.) – don’t waste your hard work by just entering their contact info in Outlook.

Good networking is definitely an art – and something I’m always trying to get better at myself. I think these suggestions are relevant no matter what stage of the network game you are playing – I hope you find them helpful. Ultimately it’s all about making personal connections and keeping up with those connections in a way that is both relevant to you and to the people in your network.

I was recently interviewed by Larry Nelson from w2w3.com. That piece is now up on the w3w3 site, and is (in my humble opinion) worth a few minutes to check out.  I talk about what it’s like to work at Foundry Group with Brad, Ryan, Jason and Chris as well as about the role of company advisors (inspired by recent posts from this blog on that topic – here and here).  Enjoy!

We were talking today at our regular Monday partner lunch about accessibility and openness. At Foundry we strive to be transparent and available – from our various blogs (the Foundry blog; plus each of our personal blogs -  Jason, Ryan, Brad as well as this one) to direct email addresses on our website. While in many ways venture capital has been somewhat of a mystery to most people, we’re hoping to provide a little transparency into our daily lives, into the mechanisms we use to evaluate companies and into how VCs think about investing in and growing companies.

With that as a backdrop, I wanted to remind readers that I love hearing from you. Comments to blog posts are great, but please feel free to email me directly – seth@foundrygroup.com.  I particularly enjoy hearing questions or suggestions for future blog posts. So keep the comments and emails coming!

Thanks to JB for pointing this out.  Pretty interesting idea.  I particularly like it from a data representation standpoint (see my post on that subject  here).

http://milliondollarhomepage.com/

I can’t promise that this will be my last pre-conference post on Glue, but I can promise that if you’re not planning on attending the conference you’re going to be missing out on a great event.  To give you a sense of who is coming (other than our great group of speakers), below is a list of some of the companies and organizations that have people already registered for the event:

AdMeld
Alsop Louie Partners
Avaya
Best Buy
Citizen Sports
Cloud Ave
Cloud Security Alliance
Denver Art Museum
Devver
Facebook
Filtrbox
FreshBooks
Gartner
Guidewire Group
IntelliWare Systems
Internet Broadcasting
Intuit Inc.
Los Alamos Nat’l Lab Research Library
Massachusetts Institue of Technology
Meritage Funds
NASA Ames
Network World
NeuStar
Paypal
Salesforce.com
Symantec Corporatiion
SynapticHealth
Union Square Ventures
UserSphere Research
Yahoo! Inc.

The level of excitement around Glue is increasing every day – I can’t wait for May 12th!

Trada (one of our Boulder based portfolio companies) is looking to hire. They’re looking for a tech-skilled individual who thinks they can do just about everything, because they might be asked to.  Primary role is testing their online advertising app but there’s a huge opportunity to contribute much more.  There’s dev work; cloud systems admin; operations tasks; end-user support; and even customer facing account management tasks that can be added to the mix for the properly skilled (and properly motivated) individual.  While still in stealth these guys are already rocking. Interested? contact Michael Lawless at mlawless@trada.com

Damon Darlin argues in an article earlier this week in the Times that serendipity has become "lost in the digital deluge". His premise is essentially that through services like Twitter, Facebook and others we’ve essentially crow-sourced content discovery and lost is the beauty of discovering "something we never knew we wanted to find" (he uses the example of browsing a friend’s CD or video collection as something that the digital age has killed).  Even services like StumbleUpon or UrbanSpoon, which are designed to surface information that users typically wouldn’t find themselves – Darlin argues – really just gravitate to the mean.

What?!?

The Internet that gives us almost unlimited access to almost unlimited information, which allows us to browse for hours on any subject imaginable, that enables us to follow links from site to site on random topics that pique our interest, that shows us what our friends are up to at any given moment, enables us to see what music the people we know are listening to, to discover new and as yet unheard of content that is related to the things you already like (music, movies, books, blogs, etc) – this same Internet is somehow killing serendipitous content discovery?!? Is he talking about the Internet that the rest of us are on?

Even the specific examples Darlin gives don’t stand up. Finding content through Twitter group think is quite serendipitous. Discovering a new band through a The Hype Machine or a news article through StumbleUpon is not only the Internet acting to surface new content, but it increases the frequency of serendipitous events. The more time we spend online the more we’re likely to find things that we wouldn’t otherwise have discovered ("ser-en-dip-i-tous – to come upon or found by accident" according to dictionary.com). In fact for me, one of the greatest things about the social web (as opposed to the information web of the late 90’s and early 00’s) is it’s ability to bring new ideas and content directly to me. I’m constantly amazed at the variety of new and interesting content that I run across all brought to me from different sources and friends across the web. It’s all quite . . . serendipitous . . .

StockTwits announced two great new features in the last week that are worth checking out.

The first is a partnership with SecondMarket to expand the StockTwits platform to include private company streams. So just as you’d tag a post with $AAPL you can now tag private companies (think $ZYNGA,$4SQ, etc). Just as it is for public equitites, tagging your posts (tweets, blogs, etc.) with private company symbols is a much more efficient way to identify the company you’re talking about and become a part of the broader conversation about a company. StockTwits has put together an impressive database of private company symbols and is adding to this list daily.

The second feature was launched with less fanfare – a WordPress plugin that takes any ticker symbol in the body of a post and links them to the realtime discussion of that company at stocktwits.com. You can see how this works in this post – check out $GOOG, $CSCO and $AAPL. Very cool stuff. From a very cool company.

I’ll admit that I have a bit of a complex about business schools. I never went (sorry – no “Seth J. Levine, MBA” on my business card . . . ) – probably because all of the schools I wanted to go to wouldn’t accept me for college, so I don’t see any reason to give them money for business school. Plus it was the rock and roll late 90’s and I still had dreams of getting rich in the internet bubble (which I did not, although I do continue to receive class action notices for various companies whose stock I owned at the time, much to my amusement). So with that as my clear bias, I have a pet peeve to share with you. I understand why many business schools are named after rich donors (in the same way that many cultural institutions have wings or buildings named after people who gave money in support of them), but why is it that someone tells you where they went to business school, they never actually tell you the name of the school the went to? I think it must be like a fraternity handshake – referring to schools in code. Personally, I think it’s annoying. No one went to Dartmouth – they went to “Tuck”; same is true for UVA (“Darden”); ditto Penn (“Wharton” – this one is even used by undergrads who studied business there); the list goes on. Even schools whose name is in the name of their business school name have to use code (does anyone say they went to business school at Harvard? No – they went to “HBS”). My all time favorite is Stanford. No one goes to Stanford business school – they went to GSB (which is short for Graduate School of Business – said in a way to indicate that really, this is the only graduate school of business in the country worthy of having gone to, so why identify the actual school – everyone will understand). I think I’m going to start telling people who ask that I went to BSOTDCB (business school of the dot com bubble), and then look at them with a blank stare when they ask me what that stands for (and in “DUH. Don’t you already know?”).

Today’s guest post comes from Ted Rosen, a partner at the law firm Fox Rothschild. How to write an effective company “teaser” is one of the most common topics I’m asked about by entrepreneurs and I think Ted has some excellent thoughts on how to prepare a company summary that hits the right points but isn’t so long that you’ll lose your reader’s attention (or make them abandon the summary before reading the important parts). Ted really nails it in the piece below. I’d especially call out “jargon free” and “keeping it simple” – the inverse of which are probably the two most common traits of poorly formed executive summaries. As always, I welcome comments, ideas, suggestions, etc. You can reach Ted directly at trosen@foxrothschild.com.

PREPARING AN EFFECTIVE EXECUTIVE SUMMARY — OR “TEASER” TO LAND VENTURE CAPITAL FINANCING

By: Ted D. Rosen, Esq., Partner Fox Rothschild, LLP

An effective executive summary — also known as a “teaser” — is a crucial tool that helps entrepreneurs catch the eye of venture capitalists and other sophisticated investors. Those venture capitalists and investors have the money that could make the difference between the success and failure of your fledgling business, but they tend to be bombarded with business plans to the point that they could not possibly read all the information they receive from business owners seeking financing.

A well-written business plan is also crucial, but it is generally premature at the start of the courtship — the right tool at the wrong time. A clear, concise, well-written teaser is an initial sales document and therefore the tool of choice to get a business owner from the start of the process to the point where an investor needs the more specific information that a business plan contains.

As legal counsel to many emerging companies, I have read hundreds of teasers and am all too often taken aback at how poorly they present the companies’ initial case for funding. Owners of such businesses and their advisors must package the business and present its compelling story in such a way that it increases the likelihood of success in a capital raise.

As with most communications, business owners seeking capital should focus at least as heavily on the venture capitalists’ expectations and desires as their own. A well-written teaser describes for a prospective investor the three main benefits that the business offers its customer base, in descending order of importance. From that, a prospective investor can weigh the likelihood of robust sales and revenue — crucial elements in the decision whether to fund. (An effective follow-up document, the business plan, will mirror this format with greater detail of the competitive benefits a company offers.) 

For each benefit to the marketplace, the teaser should describe what customers’ needs are met by the business’ products and services; touch on whether the business model is sustainable and how revenue will be generated; and discuss why customers will pay for what the company offers. Opine on whether the company offers must-have or nice-to-have products and services. Does the company solve some crucial problem for its target customers? Don’t exaggerate on any of these points and generally avoid unsupportable superlatives — the best, the only one of its kind, or self-serving phrases such as game-changing or life-altering — because savvy venture capitalists will see through that gambit quickly. Support your claims by providing supporting research — past performance, for example, or clients’ testimonials and studies that buttress your claims.

MUSTS, AND MUSTS-TO-AVOID

As with any pursuit, there are some rules of the road to follow. I have observed over the years what tactics work and which ones fall short. Many of these suggestions may seem obvious, but they are worth repeating because following them should result in an effective teaser that might catch the eye of your next investor.

In clear, concise, jargon-free language, write a reader-friendly summary that an executive in any industry can grasp. Besides describing the benefits of your goods to your customer base, explain clearly the revenue model and value proposition; include information about your market, its size and demographics so investors can judge the scale of opportunity; pricing issues and competition. Investors know that virtually all companies have competition, so trying to convince them that you don’t will damage your credibility from the outset. You should explain why you have or perceive a competitive advantage over your competitors and why you believe you will maintain that advantage, but avoid puffery and bluster.

Your management team will probably be of great interest to investors, so describe the people, their qualifications and their track records. Make projections, but make them realistic. State how you intend to use the proceeds of the capital raise, but keep that broad and flexible. Finally, state clearly how much you are seeking to raise and how you arrived at that figure.

Employ KISS twice: keep it simple, stupid and keep it short, stupid. Avoid highly technical writing because at this early stage, investors are trying to get a big-picture snapshot of your company, not what kind of alloy you use in your widgets. Technical writing will turn off an investor if he doesn’t understand the teaser, which should appeal to a broad base of venture capitalists, not just those intimately familiar with your industry. So too will excessive verbiage; keep the document to four pages at the most.

Write in an active voice, not the passive. Be realistic, but avoid negativity of any kind. Avoid empty adjectives that carry no substance. And avoid the spell-check land mine; triple-check spelling and formatting. Venture capitalists have so many teasers and business plans — and underlying businesses — to choose from that they are likely to discard those that appear sloppy.

Finally, avoid the temptation to use a power-point display to supplant or accompany a teaser. Power-point presentations tend to be too long and, frankly, too dull for most investors’ patience levels, particularly at the early stages of the relationship.