Running a company is lonely.
You need advice, help, empathy, camaraderie and that feeling that you’re part of something bigger. But instead you’re surrounded by people who want to know everything’s okay, and that if it’s not okay, that you’re “on it.”
I know the power of a supportive network. I’ve been an entrepreneur, a VC, worked in private equity and now do startups again. When I did Jive, there was no network to help me. I had to cobble together resources on my own.
When I was a Board Partner at Andreessen Horowitz I witnessed the birth of the “VC as platform” phenomena. They assembled a massive community of execs, coders, founders, buyers, recruiters, experts and everyone else needed to make a startup successful. That model is now the basis of great investment firms.
Even though this idea has taken root, I still see many VC’s, Accelerators and PE Firms thinking about their network as a glorified email group — an afterthought. It’s an incredible opportunity for a firm to differentiate their offering in a VERY crowded ecosystem, boost the likelihood of portfolio success, keep tabs on the market, save themselves time (from doing all introductions directly), source deals and just do the right thing for founders. And they’re blowing it.
Yes, I’m selling a solution. But I’m passionate about this idea. It’s the right thing to do, whether it’s with Mobilize or you build your own. A community moves you from being a checkbook, boardroom pontificator and occasional-introduction-maker into a thriving, supportive ecosystem.
I hosted an event recently on Building Powerful Portfolio Networks with some smart people who have done this work: David Wehrs (Bessemer), Ron Yerkes(Former SAP.iO Fund & Foundry), Anne Cocquyt (Founder & CEO at The Guild) and Mike Kreaden (Salesforce Accelerate). I acquired some great ideas from them and have assembled with our own below.
“Make it natural to go from public to private conversations.” — Mike Kreaden
“Make it incredibly easy for them to network amongst themselves. They all have unique abilities. Just get out of the way and let it happen.” — Anne Cocquyt
“Hiring, hiring, hiring. The portfolio network won’t thrive without talent.” — David Wehrs
A healthy community will contribute to a firm’s traditional success metrics (IRR, TVPI, etc.), but how do you dig deeper to know if your network is working well? Here are a few key measures to monitor:
“One of the biggest benefits is helping entrepreneurs not feel so alone. They have so much on their shoulders and often feel like they are the only ones who feel that way.” — Ron Yerkes
“Two events per year for each group is perfect.” — David Wehrs
Just like selling products in this era, great investing is no longer just a financial exchange, but a human one. Help founders and leaders be better people and success will follow.
By creating a supportive environment, founders will be connected to you for life, and not only drive financial outcomes, but help the firm however they can. They will feel part of something larger, and nothing builds loyalty more than that.
The metrics above are an illustration of that connection — the strength of your network. And that is the heart of the successful firms of the future.
VC investment is now 20X the levels it was in 1996. PE growth is even higher. There’s too much money and too much competition to invest. Not all firms will survive when the returns start rolling in. Now is the time to embrace the future and build a great network.