Good Referral — Bad Referral

When you send a deal referral to a VC, that’s a good thing right? Not always. Often it creates an uncomfortable, ass out hug situation where the VC feels obligated to waste 30–45 minutes of their time one way or another.

I get a lot of referrals, mostly for deals, some for service providers (not THAT kind), some referrals for weight loss pills, and anger management courses, etc.

I’ve noticed trends among the best and worst deal referrers, and how those referrals are made.

One of the best founders I’ve ever met, and I, were talking about this over email the last night. She mentioned her self-awareness about her referral reputation and it led me to attempt to categorize referral givers as follows, and let her know she’s in the Better/Best bucket.

It doesn’t surprise me that she is good at referrals because before founding her current business, she has been an angel investor herself, so she gets it.

1. 
   

   **The Worst**Just makes intros blindly and often and usually in sectors I don’t even invest in. Destroys my inbox, and I feel obligated to take the call, so it usually wastes about half an hour of phone time.

2. 
   

   **Bad**Sometimes there is a mutual opt in for the introduction, but the deals are usually bad, but sometimes decent.

3. Ok Usually gets opt in first, and deals are mediocre at best and not really vetted or thoughtfully aligned to my investment focus.

4. 
   

   BetterDouble opt in, to deals I wouldn’t have known about, that are actually good.

5. 
   

   BestGets me access to a deal I couldn’t get into without a referral. This happens rarely, in fact, I’m thinking this is just a fantasy anyway. You can reach this status even without double opt in intros, FYI, but you gotta hit grand slams to get here.