Venture capital exists as an asset class because VCs are supposed to be able to underwrite a human’s potential before its possible to underwrite their business. And in order to evaluate a human’s potential, backchanneling is necessary. Taking someone’s word for their abilities, work ethic, and moral compass is a fool’s errand. In order to backchannel a founder, they ideally they have been able to earn trust from other “nodes” in a network. One of the best tools to communicate trust at scale is the warm intro. If Susan trusts Joe, and Joe introduces me to Susan, that is a “vouch” and I am now in Susan’s network, or in other words, I have broad access to her. This is how the Bay Area operates.

This is a system that doesn’t just work in venture capital, but works in every major city and industry on the planet. Hollywood, Nashville, and New York City all run on warm intros, just like The Bay Area. And they are obscenely effective.

The issue with venture capital isn’t that warm intros exist. It’s that society has decided the only alternative to warm intros are efforts that don’t bake in any context, like cold emails, which are obscenely ineffective. When I get a cold email, I have very little context on who this person is. Even if they have impressive numbers, it’s hard to know the full picture. Are they ethical? Can they code? Are they a leader? Do they often over-exaggerate? Is this their first at bat? All of this is lost in cold outreach. And even if I ask the founders questions, only so much can be trusted without backchanelling.

Now I will be the first to admit, there are issues with warm intros. They are inaccessible and exclusive. It rewards herd mentality and leads to lack of diversity. With that said, has society invented well accepted alternatives to warm intros? Is there anything that falls in the middle of the spectrum? Anything that carries more context than a cold email but less context than a warm intro? No. You’re either in the club or you’re out, or so it seems. And society appears to believe that this is the end state.

Maybe instead of complaining about a system that works for nearly every industry on the planet, we should invent additional ways to translate trust/context among strangers. There are efforts out there. “Who follows who” social graphs, web3, and even our efforts at Seedscout have tried to build a middle ground here. But unless one gets mass adoption, we will live in a world where 1% leverage warm intros and meet anyone they want, and 99% use cold emails and starve (ironically while the 1% promote cold emails as a means to connection as “good enough”). This is hypocrisy and its finest on multiple levels, and I know we can do better than this.