TLDR: Pass along founders and their startups to at least two other investors in your network, even if they don't match your thesis.
In the early-stage funding world, there exists an invisible barrier that many founders encounter when seeking their first investment dollars. I call this the "walled garden" approach to angel investing—and it's hindering innovation and opportunity, especially for founders outside established networks.
The Gatekeeper Problem
The conventional angel investing process typically works like this: a founder manages to secure a meeting with an angel investor through some combination of connections, luck, and persistence. This first investor essentially becomes a gatekeeper. If they like the startup, they'll invest and—crucially—introduce the founder to other angels in their network.
But what happens when that first investor doesn't see the potential?
In most cases, the story ends there. The investor doesn't invest, and more importantly, doesn't pass the opportunity along to other angels who might have different perspectives, industry knowledge, or risk appetites. The founder is left without access to an entire network of potential investors who never even get the chance to evaluate the opportunity.
The Echo Chamber Effect
This gatekeeper model creates echo chambers where similar ideas get funded repeatedly while more diverse or unconventional concepts struggle to find backing. In essence, if your startup doesn't resonate with the first angel you meet, you might never reach the angel who would be passionate about your vision.
This approach disproportionately impacts:
First-time founders without established networks
Founders from underrepresented backgrounds
Startups in niche markets that require specific domain expertise
Innovative ideas that challenge conventional thinking
Direct Access: Breaking Down the Walls
A more effective ecosystem would provide founders with direct paths to multiple angel investors, bypassing the single-gatekeeper bottleneck. When founders can independently reach various angels with different backgrounds, experiences, and investment theses, several benefits emerge:
More diverse startups get funded. Ideas that might not appeal to one investor profile can find champions elsewhere.
Founders spend less time on unproductive networking. Rather than trying to find the "right" introduction to a closed network, founders can focus on connecting with angels whose interests align with their startup.
Angels see more diverse deal flow. Investors gain exposure to opportunities outside their immediate circles, potentially leading to better returns and portfolio diversification.
The ecosystem becomes more efficient. Good ideas find capital faster, and resources flow to innovation rather than to connection-building.
Cultivating a Vermont Connector Culture
Vermont has an opportunity to create a unique advantage for our founders by fostering a different approach to angel networking. Unlike larger startup hubs where gatekeeping is the norm, we can build a culture of connection:
When Vermont angels meet founders with promising ideas that don't fit their personal investment thesis, they should commit to making at least two introductions to other angels who might be interested. This simple cultural norm—"Not for me, but let me connect you"—could fundamentally transform our startup landscape.
By making this connector mindset part of our Vermont investment culture, we give our local founders an edge that entrepreneurs in Boston, New York, or San Francisco rarely experience. In those established ecosystems, rejection often means the end of the road for accessing an investor's network. Here in Vermont, a "no" from one angel could open doors to five more potential investors.
This approach leverages our community's greatest strength: our tight-knit, collaborative nature and willingness to help each other succeed. It costs nothing to implement but could dramatically increase the capital flow to innovative Vermont startups.
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