Here at 4Degrees we’re setting out to learn how the best VCs in the world go about building their strongest assets: their professional networks. For the fifth part in a series of interviews, we sat down with Laurel Woerner of RRE Ventures.
Strength in History
RRE Ventures is unique among the firms we’ve been talking to as a part of this series — in fact, they’re pretty special in the VC industry at large: they were founded 25 years ago, well before the dot-com fiasco at the turn of the millennium. This places them in rare company in an industry where business lifecycles are measured in months and years rather than decades.
Laurel was quick to spot the advantages this rich history has provided to the venture firm when she came on board as Platform Manager. Where other organizations she has worked with have focused on building their networks from scratch, RRE began its existence with a robust network, thanks to one of their founding partner’s leadership at companies like American Express, Coca-Cola, and Memorial Sloan Kettering. They’ve only grown from there, spending the past two and a half decades growing and refining their relationships into a deep resource for the firm to draw on across many different dimensions.
This history has allowed the firm to develop a sophistication in their approach to relationships that is rare among VC firms: they leverage their network to assist with all stages of the investment lifecycle, not just portfolio company support. The firm structures its network according to how individuals might help with different pieces of the venture capital firm’s workflow: through deal sourcing, diligencing a company, helping that company grow, providing exit opportunities, and starting the cycle again. They focus on developing relationships with people who are able to help in multiple stages of that workflow. For example, a technology specialist at a bank tasked with working with startups can not only be a potential customer for the portfolio but also provide feedback on potential deals and point RRE towards other interesting deals.
Allow Space for Magic to Happen
One of the keys to the scalable success of RRE’s network is to foster connectivity among the portfolio and extended network, rather than making the firm itself a bottleneck for connection. According to Laurel, this is where the real magic of their relationship development occurs. RRE facilitates a variety of digital and real-world communication forums for a wide variety of professionals to connect with each other and swap stories and best practices. When a portfolio member takes the lead on organizing an event for the community, you can see the magic in action.
Also, core to this empowerment mindset is a steady schedule of events. RRE both plans its own events and is generous in offering up its space and help to other organizations hosting events. All of these events lead to a steady flow of new faces through the metaphorical and literal doors of the RRE offices. By being open to events hosted by the portfolio and other members of the network, the firm ensures that it’s exposed to a diverse stream of different types of professionals.
Laurel’s major piece of advice on putting together all of these events is that consistency and follow-up are key to their success. One-off events leave attendees a bit without a paddle- what are they supposed to do afterward and who should they be connecting with? Event series and good communication from planners, on the other hand, create a reliable platform for connections and knowledge sharing to thrive.
The Industry has Work to do
On Laurel’s wishlist for RRE is something that’s hard to find in the venture industry: a clean and actionable database of all of the firm’s connections, tagged on every imaginable dimension. While a lot of folks are trying to address this problem (including us here at 4Degrees!), there’s no golden bullet solution for mapping out a firm’s network in a way that allows its investors to quickly utilize and improve it.
Given the lack of a magic solution, Laurel believes that the industry as a whole needs to commit itself to putting in more effort into getting information organized and usable. Nearly every VC in the world talks about wanting to build and deploy their network strategically, but vanishingly few invest meaningful time into the structured activities required. Until 4Degrees perfects the magic solution, a lot of value can be brought to the industry by a relatively modest effort to enrich connection datasets manually.
For more ideas on this topic, explore How Networking Helps VCs Source Deals.