A Network for Today, but what about Tomorrow?
Welcome Founders!
In our last article The Power of a Network (of Networks!) we looked at the need for Founders to develop a network to support the success of their Startup. Quick recap of a couple of key points:
1) Any network is, in fact, a Network of Networks!
A Network of Networks, because anyone in your network has their own network.
2) The easiest way to expand a network is to leverage the network you already have, because you (should!) have higher credibility being referred to new connections by your existing network.
With that recap, let’s take a closer look at how your network helps your business. For the purposes of this, for simplicity we’re going to look at the growth of your businesses by the investor funding profile (as this is most likely to be one of the ways your network needs to help you). Other ways include increasing size/complexity of customers or the increasing expertise of key advisors (tax or legal for example).
The investor funding pipeline looks like this:
Funding pipeline by investor type
As most investors tend to end up investing only in companies at particular stages, Founder’s need to continue developing their investor networks as the Startup grows to ensure they are pitching to the right investors. So, as the business grows, the investor network needs to develop too.
The same principles will also apply to your customer network, advisors etc - as your startup grows, the size of customers will increase and the level of complexity in your taxation, legal and operations will increase. Therefore, you’ll need to broaden your network to include customers and advisors that will suit your new complexity and size.
Key tips!
Allow enough time to expand your network
As a guide, assume that expanding your network to include new connections will take 4-6 months per connection. What does this mean in practice? Well, using investors as an example, you’ll want to start warming them up 2-3 months before you’re ready to pitch. Then following the pitch, allow 6-8 months (conservatively) for the process to complete and funds to be received. That means you need to start the process of expanding your investor network 8-11 months before you need the cash!
Expand using a combination of references from your existing network and attending conferences/seminars
Conferences and seminars are excellent for bringing key players into a single place (assuming you attend the right one!). Making initial contacts here is likely to be very time efficient. You can then follow up and establish credibility by referencing people in your existing network.
Use your network, but don’t abuse it!
This is pretty self explanatory. People in your network have their own lives and jobs to do, so don’t abuse their time.
We’ll bet that some of you are thinking about the time this is going to take. Yep, it does take time. However, done properly, it will not only save you time later, but your expanded network could easily be the difference between success and failure!
Start now by taking just 5 minutes to identify where your network is strong and where effort needs to be spent!