The Money Connection—Understanding VC Networks (HBS Working Knowledge)
Key VC Networking Concepts
- Networks are important in all industries, but especially so in VC where investment opportunities can be located far away from the centers of venture capital.
- "Spanning ties" enable investors with fixed locations and industry expertise to learn of opportunities outside their geographic and industry domains, while also reducing risk.
- Ties are more likely to form between VC firms in the context of bandwagons, such as a "hot" IPO market, that create a rush of excitement around particular types of companies.