When we were raising money for FlightCaster in Fall 2009, we met with dozens of investors, both VCs and Angels. Most of them turned us down. The investors that did put money into FlightCaster provided us a ton of value, both in terms of their capital and all the support/guidance/networking.
And what about all those investors that had turned us down? They actually ended up providing a lot of value as well, and that's what this post is about. I had noticed a funny trend from each one that had turned us down. They all closed with a variant of this statement:
"If there's ever anything I can ever do to help, please let me know."
At first, it sounded like a standard pleasantry, in the same vein of "I wish you the best of luck." But then, I started thinking about why it was that every investor was saying it. I realized that there are two forces at work here:
The first is that many investors are genuinely nice guys that do root for entrepreneurs. Many made it as entrepreneurs and remember the pain and the hustle. If (and this is an important if) an action is not at odds with their fiduciary duty to their limited partners, most investors will do what they can to support you.
The second force at work is pure incentives. Investors know that relationships matter. An investor that passed on a company may want back in at a later point if that company takes off. Or she may want to fund a future company of that entrepreneur. Doing favors without an investment is a cash-free way to prove to the entrepreneur that they have real value to provide in addition to their capital.
So, back to our story. I decided to take them up on their offer. All of them. I literally contacted every investor that turned us down and asked for a concrete favor.
With a few hours on LinkedIn, I was able to see which investors knew someone that knew someone we wanted to meet. I sent a personalized version of this email to all those investors that offered to help:
Thanks for offering to further support us as we build FlightCaster.
Right now, we're preparing for the PhoCusRight conference next week, the travel industry's largest get together. We're trying to make some connections with people at the conference. Can you help us connect with leaders in the Business Travel divisions of Expedia or Orbitz? Or any other introduction that you feel would help us?
Thanks for the help!
And you know what happened? A huge number of those investors responded within 48 hours, and most of them were able to help in some way. And it was the most impressive investors that responded the quickest. Here's the response I received from Ron Conway the next day (using his classic all caps):
I KNOW THE CEO OF EXPEDIA…send us an email template to send to him
So, yes, we got introduced to the CEO of Expedia because Ron Conway, who had previously passed on investing in us, was willing to help. Booyah!! Why did he do it? Because Ron Conway is also one of those guys that is fundamentally rooting for the entrepreneur.
The other reason he did it? Because we asked. You don't get shit you don't ask for.
A few tips on asking for help:
Ask for what you want
Make your request very concrete
We didn't ask for general advice. We did our homework and made very specific requests. It's much easier for people to respond to concrete requests. Even if they can't provide for that direct request, the specificity of the request helps them find an alternative way to help.
Don't use and abuse
I only wanted to ask these incredibly busy investors for help once or maybe twice. Obtaining industry introductions was one of the most important necessities of our startup. I made sure to ask for something that they could provide with minimal effort and risk.
Pay it forward
We're all part of the same innovation community. This whole entrepreneurship thing is hard for everyone, but fortunately, everyone has something to offer. Don't procrastinate on giving back.
Say thank you
Investors love knowing the outcome. For both personal and professional reasons, they're interested in long term relationships. Do your part by keeping them up to date with your successes. I like to email everyone that helped me immediately prior to something showing up on Techcrunch. It helps me communicate to them that I appreciate everything they did to be a part of our success.
Give it a shot. The worst that can happen is that they say no. And even that's not so bad--investors love knowing that you hustle. So hustle.
Thank you to all the outstanding individuals that didn't invest in FlightCaster but still went out of their way to support us:
and many more...
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