Q. Why do so many venture capital funds say they prefer that entrepreneurs get  personal introductions to a venture fund rather than soliciting the fund directly? I thought venture capitalists were more open to hearing new ideas from new people. Or is it just an exclusive club designed to really keep people out?

A. Ok, ok, I admit it.  Entrepreneurs who receive venture capital from the nation’s treasure chest of seed-stage technology incubators, early-stage venture funds and later-stage private equity funds are very much a part of an elite group. Their accomplishments are distinctive, since just a few thousand companies nationwide will get funding from organized investment firms each year. 

But, while I acknowledge that there is a certain level of exclusivity within this community, the more traditional benchmarks of social standing such as family name and wealth don’t carry much weight among venture capitalists or “VCs.” Rather, their doors and checkbooks open to charismatic entrepreneurs who can persuade VCs of their big money making potential. 

Because the VC selection process is mostly democratic in a Darwinian, survival of the fittest, sort of way, I’d say there is nothing sinister about a venture fund’s request for a reference introduction. Actually, it makes good sense.

Consider this. Venture funds receive dozens of business plans each week. One way to whittle down the candidates to manageable numbers is to create some early performance hurdles to help identify unusually determined entrepreneurs. VCs know that successful entrepreneurs have to be unflappable problem solvers. Finding a reference is a small challenge in comparison to the competitive traumas of business building.

The second practical value of references is to test an entrepreneur’s ability to network.  VCs call this skill “eco-system development.” They recognize that management teams, especially in high technology industries, need to collaborate and develop technology-sharing alliances. Entrepreneurs can’t be socially shy if they want to succeed.

Fortunately, most venture funds accept referrals from a wide range of venture community sources. The most meaningful references come from local angel investors, respected investment bankers, other venture capital funds, or professionals who provide accounting, legal, head hunting or advisory services to the venture fund. 

So, how can an entrepreneur network to venture funds that are located in other states or across the country? One way is through a target fund’s portfolio companies.

Start by reading the venture fund’s Web site carefully. Identify the partners who are responsible for evaluating opportunities in your specific industry. 

Pay attention to the partners’ participation on portfolio company boards of directors.  This is your money list! Contact the CEO or CFO of the portfolio companies because these individuals have the most day-to-day interaction with their venture investors.  Most venture fund Web sites have links to their portfolio companies’ Web sites to help you make these first connections.

When you reach out to portfolio company executives, ask for a brief phone call. Say that you are interested in pursuing venture capital financing and want to learn more about the entrepreneur’s experiences with the target fund. Success is getting the executive to talk more than you.

Overall, your goal is to convince VCs and their referral sources that you are worthy of a “first look.” There is no need to oversell your deal here. Just focus on the basics of your business vision and networking objectives and you will move one step closer to the reference you desire.

Susan Schreter is a 20-year veteran of the venture finance community and small business policy advocate.  Her educational work is dedicated to improving startup longevity and operating performance in rural, urban and suburban America.   She is the founder of www.takecommand.org, a community service organization that offers the largest centralized database of startup and small business funding sources in the U.S.   Follow Susan on Twitter @TakeCommand.