The Value of Fostering Meaningful Relationships Along the Way

Throughout my career, I have encountered varying walks of life. Some of them taught me to stop and smell the roses, some pushed me to leap into unknown and exciting waters, and others provided me with the support I needed to endure either of those extremes. Across time I have found that the social bonds that occur naturally in personal and professional relationships tend to take on a symbiotic form organically. As I begin to create a venture, it is easy for me to reflect on the vast array of friends, coworkers, and acquaintances who will be absolutely necessary in some form throughout my entrepreneurial journey. Skillset stars, support systems, experts, and freethinkers comprise the army necessary to take the next steps.

Social Capital:

When discussing the necessary components of launching a successful start-up, capital is typically the focus. However, most assume that when using the term capital, one is specifically referencing money. While funding is an innate need in any new business, other things can be equally valuable and integral in the success of an entity. Social capital is the skill of using relationships, networking, and commonalities to leverage the expertise and connections surrounding an entrepreneur. As mentioned in The Role of Social Capital in Promoting Entrepreneurial Success a founder’s peers can help them tap into resources, ideas, and experience that would not be available otherwise. Social ties can lead to funding opportunities, human capital in the form of more competent team members, and even mentors to help the budding entrepreneur with making significant decisions.

Financial Capital:

As mentioned earlier, financial capital is the predominant conversation piece in entrepreneurial planning. Yet, the building blocks of obtaining funding are different for each new venture. Research shows that social constructs not only affect how private investors choose to use their funds, but they can also influence how banks make lending decisions. Through the studies of Brian Uzzi, we learn that relational bonds and trust built between a business or a founder and the professional community around them can be as significant of an influence in lending opportunities from financial institutions as financial statements and credit worthiness. Uzzi’s findings also show that banks are more likely negotiate and possibly offer less traditional terms when a reputable social network is tied to the entity seeking funding.

Network Reciprocity:

Capital is a construct that can be fluid in many senses. The overlapping of social and financial capital is something that a budding entrepreneur should not ignore. Each person that we meet along our professional and person paths should be regarded as an opportunity to learn something new or become something better. Every unique individual brings something to the table, and it would a mistake to forgo any opportunity to create value through social network enrichment.