14 Oct Getting the right introduction
Whether looking for an investor, a joint venture or joint development partner, a strategic hire, or your next CEO, a warm introduction is almost always better than a cold call or solicitation. But the quality and effectiveness of warm introductions vary considerably. In fact, setting up the right type of introduction from the right type of person can be a test of your entrepreneurial skills.
What Makes a Good Introduction?
In essence, there are at least two elements of a good introduction: (1) the introducer is someone who the prospective investor, joint venture or joint development partner, or CEO (for short, I’ll refer to this individual as the Targeted Person) listens to; and (2) the introducer has something persuasively positive to say about you or your company.
Types of Introducers
Using an unscientific approach, here are my tiered groupings of people from whom to make your warm introductions:
1. The introducer successfully concluded a recent close business relationship in which the Targeted Person did very well.
2. The introducer has an on-going regular business relationship with the Targeted Person that is going well.
3. The introducer is someone well known to the Targeted Person and he, she or it is eager to do business with the introducer.
4. The introducer and the Targeted Person are close socially (e.g., families going on vacations together)
5. The introducer currently works with or has worked with the Targeted Person, but not closely.
6. The introducer has a good close working relationship with an affiliate or existing partner of the Targeted Person.
7. The introducer is an acknowledged scientific expert or significant player in the industry and is known to the Targeted Person, by reputation
8. The introducer and Targeted Person has an on-going regular or previous business relationship that is not going well (or did not go well) through no fault of the introducer.
9. The introducer knows the Targeted Person only through casual social situations (e.g., reception, conference, party, mutual friends).
Of course, there are situations where a “warm” introduction from a hostile source can lead to a problem, one in which a cold call may yield a better result. But in most cases, a positive introduction from even a “bottom tier” introducer is better than no third party introduction. For example, I’ve heard a number of venture capitalists say that they have never (ever) invested in a company that sent directly its summary or PowerPoint over the transom.
The Positive Message
Just because you have someone lined up who is a top tier or middle tier introducer, does not mean you are set. As an illustration, I have a client who was looking for an introduction to a particular potential joint development partner. The CEO of the client discovered that an MD working at one of the client’s clinical trial sites had previously done a lot of work with the targeted joint development partner. Upon discovering this, the CEO quickly moved to ask the MD for the introduction, which the MD agreed to do. As it turns out, the MD by his nature was very measured in his words when making introductions. In making this introduction, the CEO later found out that the MD spent as much time disclaiming knowledge about the CEO’s company and its prospects as he did explaining in a measured way the positive results of the recent trials. While the CEO did get the meeting, he spent considerable time explaining why the MD was not more enthusiastic about the CEO’s company.
So, how do you ensure a positive message in the introduction? Ask the introducer what he or she is going to say. That sounds obvious, but it is frequently not done because of social etiquette in many circles. You can provide the introducer with an elevator pitch length email about your company. You can provide him or her an executive summary or the bullet points to touch on during the introduction. You should do as much work as possible for the introducer to make sure that his or her job is easy and that he or she gets the facts right. That said, the introducer should know the basics about your company as the prospective investor, joint venture or joint development partner, CEO, etc., will likely have at least one question for the introducer. If the introducer does not know rough headcount or revenue numbers, or whether the company has filed an IND, for example, not only can that be embarrassing to the introducer but it will also degrade the effectiveness of an otherwise good introduction.
While serendipitous introductions or connections do happen, most times a good introduction is the product of deliberate, diligent entrepreneurial efforts of finding the right person with the right connection to deliver the right message.
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