How Entrepreneurs Can Maximize Networking to Increase Funding
Networking can seem daunting, but every entrepreneur knows its power -- especially when it comes to raising funds.
Networking is a powerful entrepreneurial tool. Whether you’re trawling for new clients or seeking to gain new skills, it can deliver myriad benefits on both an individual and a business-wide level.
Networking can help owners keep both themselves and their business at the forefront of their industry. It can also be a critical lifeline to find new investors during the startup and growth phases.
To help maximize your networking efforts, particularly if you’re seeking funding and investments for your company, try these three tips:
1. Steer into virtual networking
In the past, networking was largely an in-person activity. However, in recent years, virtual networking has become both an acceptable and common way to connect with other professionals.
The recent public health crisis took that trend and gave all things virtual a steroid shot. Not only did the pandemic boost remote work, but shelter-in-place orders and social distancing mandates increased the need for virtual networking as well.
Some of this need has been met by industry behemoths like LinkedIn, Twitter and Facebook, each of which addresses various virtual networking requirements. LinkedIn provides professional information in an online format, while Facebook is great for group-centered communication and the sharing of information. Twitter provides up-to-date and breaking industry news. But these legacy platforms are far from the only games in town.
One platform taking a new angle on the making of virtual business connections is Upstream, which launched in October 2020. Rather than trying to outdo LinkedIn’s “Rolodex” capabilities, Upstream’s banner feature is the Professional Ask. Whether you’re seeking a new marketing manager or a seed round, you can put your request out there — and get a response. Entrepreneurs have found the platform an effective venue for raising funds.
From posting résumés on LinkedIn to joining interest groups on Facebook, there’s more than one way to meet your virtual networking goals. Investigate your options so you can start making connections in search of funding and support.
2. Set clear networking goals
Speaking of goals, if you want to be effective in your funding-focused networking, you need to make a plan. This can help you tailor your networking efforts to help ensure they work toward luring potential investors on a regular basis. Some powerful networking goals include:
Focusing on quality connections
You should always value quality over quantity when it comes to your network. Bonnie Elliot of BDC’s Calgary Entrepreneurship Centre recommends cultivating “the movers and the shakers” of the business world. It’s these hyper-connected individuals who can steer you to the professional mentors and funding sources you need, not the 50 casual contacts you might make at some random event.
Polishing your delivery
Networking should never be a performance. It needs to feel natural and organic. However, asking for funding can make anyone nervous, so it pays to hone your delivery. Take some time to get your pitch straight. Weed out unnecessary details and practice being concise. Find the facts and statistics that truly matter. Get used to communicating both online and in person.
Identifying clear opportunities for your “ask”
You’ll also want to learn to recognize what is a good opportunity to make your funding request and what isn’t. If you’re actively collaborating with a busy entrepreneur, that’s not the time to interrupt your joint efforts to make your pitch. If you want to approach them about funding a new project idea, send an email or book an online office hour session instead.
While your ultimate objective is securing funding for your venture, recognize that some intermediate networking goals are a prerequisite. From whom you network with to what you say and when you say it, it’s important to set goals beforehand.
Related: The 5 Golden Rules of Goal-Setting
3. Don’t get discouraged
Networking can feel like a lot of work — especially when you’re trying to recruit investors. You need to find the right tools. You also want to invest in the right relationships. Even if you succeed with those requirements, you may still find your attempts to raise funds too often meet with failure.
When this happens, remember that you’re not alone. There are countless others who are in a similar situation to yourself. Like you, they are out of their comfort zone, looking to make professional connections that can be mutually beneficial in the future. If they can persevere, so can you.
Above all, resist slipping into discouragement. Lawyer turned entrepreneur Ryan Clements recommends re-framing failure as education. If a networking attempt didn’t turn out as you hoped, there are other contacts, other pitches, and other opportunities you can try. Evaluating what didn’t work in one networking situation will help you do better next time.
As you set up virtual networking tools and devise strategies, guard your emotions against discouragement. The willingness to keep trying is critical. If you can do that, sooner or later your well-equipped, strategic, thoughtful networking attempts will yield financial fruit — and likely many other benefits besides.
Funding for your venture won’t fall from the sky, so you’re going to have to do the hard work of seeking it out. Networking is a critical component of that search, and when you embrace these tips, you’ll increase your chances of making it a successful one.
Entrepreneur Leadership Network Contributor