If You Want to Woo A Venture Capitalist, First Offer a Tip

10/31/06
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By Joann S. Lublin, Wall Street Journal
October 31, 2006


You're keen to venture into a hot, young enterprise backed by venture-capital firms. But you know no one in this booming arena, where personal connections are crucial.

Venture-capital firms place risky bets on tiny start-ups in hopes of big payouts later. They poured more money into U.S. businesses last year than any year since 2001. Now, busy venture capitalists find themselves flooded with inquiries about jobs at their portfolio companies. They typically ignore unsolicited résumés, however.

The sender "could be the most competent executive in the world or an ax murderer," explains Jeff Bussgang, a general partner at IDG Ventures, a Boston arm of International Data Group. "I don't have three or four hours to figure it out."

The best trick? Catch a venture capitalist's attention with a treat -- such as an attractive investment idea. "It is a terrific way to get the dialogue going and can serve as a launching point for a long-term relationship," observes Craig Driscoll, chief recruiting officer of Highland Capital Partners in Lexington, Mass. An aspiring applicant should also offer to help investigate promising start-ups and rising stars in that individual's field, Mr. Bussgang says. "Come bearing gifts," he continues. "Don't come seeking favors."

That's what Barry Morris did. The former chief executive of Iona Technologies, a Dublin-based software company with executive offices in Waltham, Mass., approached Highland nearly three years ago about possibly creating a business to manage software-development projects more efficiently. The venture-capital firm gave him free office space at its headquarters' entrepreneur center. His market research, concluded in spring 2004, persuaded him to drop the new-business concept. Nevertheless, he stayed on as an "entrepreneur in residence."

While advising Highland about other investments, Mr. Morris grew close with its software partners. He soon found himself "on first-name terms with the key people" there, he recalls.

The exposure paid off. In November 2004, Mr. Morris took command of StreamBase, a small software maker partly backed by Highland. He subsequently recruited all but one of his six top lieutenants based on recommendations from venture capitalists.

There are other ways to snare such a valuable introduction. You can showcase your expertise at industry conventions and high-tech conferences that venture capitalists often attend. Give a speech, run an exhibition booth or persuade your current employer to sponsor a session about a hot topic that you know well.

Rather than just hand business cards to venture capitalists you meet, send them a brief summary of your career via a text message. "It gives you a little bit of a leg up," says Rick Robinson, a vice president of Freewebs.com, a Web-site publisher in Silver Spring, Md.

Freewebs hired Mr. Robinson in June largely as a result of a meeting with a venture capitalist that a mutual friend arranged. The investor, whose firm took a stake in Freewebs, "was impressed that I have an understanding of online membership behavior and the kinds of products [members] like to use," says Mr. Robinson, a former staffer at Time Warner's AOL unit. To get noticed by venture capitalists, he remarks, "you just have to find one person who can open doors."

Your door opener might be a highly trusted executive recruiter, banker, attorney or accountant serving a venture-capital firm. "Explore your own network for common connection points with VCs [venture capitalists] that can serve as sources of introduction," suggests Highland's Mr. Driscoll. Whether it's your college alumni group, your children's PTA or the nonprofit board that you serve, "every association and affiliation can be used to advantage," Mr. Bussgang concurs.

Pursuit of venture capitalists through external contacts can take months, however. Sometimes, a multipronged approach makes more sense. Laura Fortner, a business-development vice president at CNN, wanted to join an early-stage business with high potential. She knew a Highland partner named Fergal Mullen from their Harvard Business School days.

The New York businesswoman initially didn't contact him about opportunities because she figured Highland invested only in Boston-area concerns and she didn't want to relocate. Early last summer, Ms. Fortner discovered Career Network, a centralized job board that Highland operates for its portfolio companies. The online system has attracted 4,800 candidates since its October 2005 debut. More than three dozen professionals and managers have landed jobs at roughly 15 of Highland's 50-plus portfolio concerns.

Through Career Network, Ms. Fortner spied four interesting openings at ClubMom, a social network for mothers. She asked Mr. Mullen to confirm they remained unfilled. He recommended her to Mr. Driscoll, who introduced her to Michael Sanchez, ClubMom's CEO. She became its senior vice president for business development in mid-September.

"I don't think we would have found her without Career Network," Mr. Sanchez says. "It extends this larger social network that already exists" among venture-capital investors

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