Find Egg-breakers: People With Influence and Authority Who Are Unafraid to Use Them

Posted on Feb 27, 2012 | 21 comments


This came up again today so I thought I’d dust it off, update it and republish. It’s as timely as it was when I first wrote it 2-and-a-half years ago when few were paying attention to my blog ;-)

VC’s keep different titles but the most common that I’ve come across that are investment professionals are (in ascending order of seniority): analyst, associate, principal and partner.

These are the permanent members of a VC.  Then there is the EIR (entrepreneur in residence) who is usually at a VC for a temporary period of time and other individuals such as venture partners or operating partners.

The process for raising money from a VC is a sales process and as such much of what is taught in enterprise sales can be applied.  While this post is written about raising venture capital (which I always remind entrepreneurs IS a sales process) the lessons can be applied to any sale or biz dev deal.

This lesson on NINAs applies to VC pitches as well as any sale.

1. Some people have authority (A)

Somebody with authority is a decision maker.  That’s obviously a good starting point in any sales process.  I’ve always subscribed to the “call high” philosophy of sales where you hope that your initial entry into any organization is the highest level at which you can usefully be introduced.  In a VC firm the people with authority are clearly partners, although some firms have principals that also have authority.

But don’t confuse authority with “sole” authority.  Often times in a VC firm, as with enterprise sales, getting to yes requires multiple partners to agree.  And don’t assume that because a person’s title is “managing partner” or “founding partner” that this necessarily means that person has more authority than other partners.

In every firm, VC or otherwise, there are people who get deals done.  They are people who are persuasive (see point 3 below), who compile relevant facts and who are willing to put their reputations on the line to get a deal done.  You’ve likely dealt with this if you’ve done sales or biz dev in your job.  You’ve likely met SVP’s in companies that never seem comfortable with pushing though decisions without a large number of other people validating the decision.

The same can be true with VC partners – some push deals through and some seek broad consensus or air cover.    But anybody that has authority (read: a vote) must be treated seriously.  You need to understand and get to know the interests, issues and concerns of every person who has authority over the decision that your firm wants.  Every person with authority has a vote.  And don’t assume that just because you have a partner as your “champion” that it means that you don’t need to spend time with the other partners so that they also feel bought in.

2. Some people have influence (I)

Let’s face it – you can’t always start at the top.  In VC you might get an introduction to a partner through a colleague of yours who is a lawyer or an entrepreneur but the partner may ask for the deal to initially be screened by somebody more junior in their firm.  Don’t view this as a slight.  When you think about a typical VC who sits on 5-7 boards, has to raise money for his/her firm so that they can invest, has to help run the operations of their fun, is swamped with inbound emails or requests for meetings and gets involved with industry events like speaking at conferences – there is always going to be a need to get some leverage by having trusted resources help evaluate your company.

When you spend time with analysts, associates, principals and even EIR’s realize that many of them have “influence” (e.g. they can recommend whether or not your team gets more time and attention).  But just remember that they are  not check writers.  Be careful in sales not to make assumptions that because somebody’s job title is high that they have influence or because a person’s job title is lower means that they don’t have influence.  And each analyst or associate may have different levels of influence with different partners.  So how could you find all this out?

I have heard some people in VC round table debates say not to bother spending too much time researching the individuals of a VC firm – you have more important stuff to focus on.  I disagree.  I think if you’re running a sales campaign to raise money and you’ve identified a firm that you think will be a good fit for you that you should put in the time.  And frankly if you do get a term sheet one day these are the people you’ll be working with so the more you know them (and their reputation) the better.  The most obvious way to know about your contact’s influence is to network with portfolio companies or other entrepreneurs that have pitched this VC before and get their insights.

If you build good rapport with the non-partner resources then you might be able to get clues from them about how to get deals approved by the partners.  See if they will help you figure out which partner is likely to be most interested in your company’s space.  And get advice from them on how to best manage the approval process.  Importantly, ask for their support in getting the partner meeting set up.  These are all things that an enterprise sales person would do in their sales process.

3. Some people have influence & authority (IA … aka Egg Breakers)

Obviously the people that you REALLY want to get access to are the people with both influence and authority. Sometimes these people are all you need to get a decision done. But some IA’s are consensus-driven or lack the strong conviction to make up their own minds. Sometimes they have IA but when somebody argues a countervailing point of view they back down.

You want IA … but don’t confuse it with one’s willingness to get decisions made.

Then there are the people who are “willing to go to the mat” for projects they believe in. They have conviction, they are willing to risk failure and they hate sitting around and watching groups not make decisions. Often they are impatient and have ADHD.

These are the broken-eggspeople I call “egg breakers” because they’re willing to get rough to get things done even when it requires being forceful. And you know the old saying, “you can’t make omelets if you’re not wiling to break a few eggs.

These are the people that will metaphorically (or sometimes literally) slam the table and say “we need to do this deal and here’s why …”.  They not only have a vote at the table but the skill & will to get decisions made.

Very few investment decisions are unanimous “no brainers” – just imagine having been pitched Google in a world where you had previous search engines like Alta Vista or given the success of Yahoo!  Imagine having been pitched Facebook in a world where MySpace seemed to be running away with market share or more recently having been pitched Twitter when Facebook seemed unstoppable.  Your goal in any sales process is to find and nurture egg breakers. Even better when they’re IAs.

VC is no exception.

4. Some people have No Influence & No Authority (NINA)

But of course the people you need to be the most careful about spending too much time with are people with No Influence & No Authority (so called NINAs).  In enterprise sales these are the people that worry me the most because they are often the easiest to meet and spend the most time with you.  I’ve worked with many sales reps over the years who spend time with time-wasting NINAs because they’re easy and make you feel good.

NINAs will tell you that your products are great and that your competitors stink.  It’s hard to go into the lion’s den and see the people who are most cynical or give you a rough time.  So many people naturally gravitate towards NINAs.  Remember that not only can they not make decisions but the missing “I” is key – they have no influence.  People tend not to listen to them very much or they don’t have good political support to get initiatives approved.

How do you know when you have a NINA?  Aside from the obvious point I always harp on about (asking portfolio companies and other entrepreneurs that have pitched to them before), the best way to tell is when you ask them to help you with the next step (i.e. getting to a partner meeting) and they’re either not able to do it or they keep requesting 3 more meetings before getting there.

NINA’s take on another form in VC, though, which are the “VC Zombies”.  These are the funds that are at the end of the life on their investments and do not seem to be able to raise a new fund.  They continue to take meetings with entrepreneurs but they never fund anything (because they can’t).  These are very easy to flush out with some basic research: how many deals has the fund done in the past 3 years and when was their current fund raised (many funds are 10 years in length).  No new money, no new deals = NINA.

The only way to deal with NINAs in enterprise sales or in VC is to go directly to somebody else in the firm who has either influence or authority.  Or talk with a different VC.

  • http://NextVideo.co/ Robert Haydock

    I agree with you about the NINA’s. You can’t learn anything from them and they can delude you into thinking you’re in a much better position then you actually are. It’s much better to have to argue your case and learn something then talk to yes men. If you win over a critic over time it can be immensely powerful!

  • http://technbiz.blogspot.com paramendra

    There is NINA. And – off topic – there is a TINA: There In No Alternative! :-) 

  • CMKelly

    More great timing, both with this post and the last one! A founding partner at a big SV firm has asked me to send him a business plan. I know he has both influence and authority, and since it’s for a personal, seed investment, he’ll make a quick decision. For other firms, though, it can be hard to figure out who has I and A. How do you find people who’ve pitched them, unless they’ve been funded? If they’ve been funded, would they have the time to talk about this? 

  • http://www.alearningaday.com Rohan

    Small note/edit suggestion: Applicable to all walks in life – and definitely beyond VC.

    :)

  • http://www.interscope.com/ Rob Harvey

    Worth reading 2x.  Apply, and gain advantage, period, regardless of industry.  It is the seller’s job to not only know their product and market inside and out, but to also know the company and personnel they are trying to sell it to, same.  Study hard, ace the test.  Good one, Mark.

  • http://byJess.net/ Jess Bachman

    You have an acronym fetish Mark.  I refer to them in reverse, as NANI.  Then I refer to People Operating On No Authority & No Influence as POONANI.  This is one of the few business concepts my teenage step son will listen too.

  • http://www.cono.rs/ Conor

    I love the NINA concept…  they are dangerous, and they “rub off” on you.  There are people who’s support of your initiative almost guarantees that it will sink ;-)

  • Yoav Cohen

    Mark. Out of the VC blogs i’ve read, you’re the best out there. No BS. Straight to the point. And most importantly in favor of entrepreneurs. Pleasure. 

  • Steve Pell

    Mark this is such a relevant piece for anyone who’s dealing with corporates trying to get anything done (not just selling equity). These categorisations really strike home for most departments of any larger corporate

  • http://www.bluecoastrecords.com/ Cookie Marenco

    Thanks, Mark.  NINAs … love the term.   And will take note on types. 

    I’ve had more than my share of NINAs from the investment world.  Mine have been wimpy characters who like to spend a lot of time going to dinner to ‘discuss’ what comes next insteading of “doing” anything real. 

    NINAs..   insecure insects who feed on other people’s energy.  Mosquitoes.  That’s in the dictionary, right?

    Looking forward to the comments from you and others. :)

  • http://www.rigsourceinc.com/ Drill Rigs

    Someone has to have the responsibility of being the Alpha when the chips are down. Hard decisions are just that… HARD. Executing them is just as hard when it comes to confronting productivity or revenue inconsistencies. Egg Breakers are an essential part of business, you just have to decide if you want to be one or face one in your future.

  • http://blog.ideatransplant.com Jan Schultink

    My wife has gone through the ranks in VC and as a partner probably now has authority. 

    But not so long ago, it was just striking to see how entrepreneurs would disregard her in a more junior role. Annoying the only person in a firm who is working on your deal and caring about it does not help. Trying to bypass her and make her look weird in front of her partners is the fastest way to get your deal turned down.

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    awesome post as usual 

  • http://www.danspinato.com/ SanDiegoChiropractor

    This information is fantastic because it is the most useful accoutrements who are dealing with common work groups. Our experiences have been different and reflect the organizations we work for.

  • http://www.careerwithonlinedegrees.com/ Career Online Degrees

    Very well said :-).

  • Ryan King

    Great post on relating roles in the VC world to selling. In enterprise sales we’re always vying for decision makers. We often try to find those influencers as a second best. But we cannot undervalue the non-influencers who are great navigators. A lot of sales training paints these amazing pictures of how things went perfectly in the sales process or pitch. Spending very little time discussing the gathering of knowledge on influencers or decision makers. Having a coach in the organization is a valuable tool. As long as the role of the coach is understood (including their possible lack or influence or authority). However sometimes the have power which is of course ideal. Which puts them closer to what you describe as egg breakers if they know how to excert power.

    I’d love to hear your thoughts on the coaches that help outsiders navigate the waters of the I/A’s of the VC world.
    -Ryan

  • Chris Hill

    I think your points speaks heavily to the importance of influencers and the tendency of many people in dealing with Sales, VC’s, etc. to err in how they these type of people. Do they they authority? No. But when provided with the opportunity to provide an opinion or insight, i.e. influence on a potential investment partner, sales partner, etc., they can color the perception of the decision makers in surprising ways. If you’re not willing, or unable to treat the coworkers of an individual you are looking to partner with in a manner consistent with your goals with the authority maker, it can speak volumes about how you deal with your own employees, customers, etc.

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  • http://wildrocketsledgeride.com/ bluesteel

    Definitely a good point, not only when treating with VC’s :)

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  • http://www.uprightvacuumcleanerreviews.com/ Anthoine

    People will sometimes take haste in their decisions without knowing that it will hurt rather than help them. This is also true in the business arena. The more haste you put into a matter, the larger chance you get in terms of drawbacks.