Gatekeepers to Nowhere: The Carl Effect
Building real connections beats buying someone else's rolodex every time
Sometimes as a founder you’re faced with a dilemma of who will advise your business interests. You’ll meet all types of characters along the way – attorneys, accountants, networking contacts, investors, etc. Within this group you’ll find a shady character or two, the worst being the ‘investment consultant’ offering you connections with investors, access to business networking contacts and more. This is a person who promises you the world and usually doesn’t deliver.
Early on I worked with a startup that sold party supplies in bulk. Pretty simple business plan, buy from Asia, repackage and sell in bulk. We’re talking balloons, streamers and party favors, you get the picture. They came to me with the hopes of expanding their business to a larger warehouse and receiving facility. They distributed only to West coast states at the time and wanted to expand to include the entire United States. I met with them, their banker, accountant, and a quirky business advisor named Carl. My job was to assess what they had to see if I could go in front of some private equity and institutional investors for a working capital structured loan. Once completed, Carl set up a meeting with an investment bank and that’s where things took a (mostly) unexpected turn.
The meeting itself was largely unremarkable. The bankers were nervous a deal could get done, the company was eager to get a deal done and Carl was sitting at the table playing Angry Birds on his phone. Carl was an odd fellow, a die-hard golfer, he spent more time talking about his handicap than any business metric. The two sides were very far apart, and the meeting ended without funding secured. Carl was furious after the meeting, blaming me and the company for wasting his time. The real problem was Carl overpromised much more favorable terms to the company than the investment bank was willing to provide. This resulted in both sides being a mile apart on negotiations just as the meeting started. I suppose Carl just assumed we would say fuck it, let’s go with these guys even if they’re more expensive. As Carl raged on after the meeting about his value and how much time he wasted with us, I told him this would be the last we meet; his blatant disregard for our needs as a client were not met and his style of ‘consulting’ isn’t something I’m interested in going forward.
Carl was not an investment consultant of any means. He was, what I refer to as a ‘professional networker.’ This was someone who goes to all types of events and networking opportunities simply to add folks to his contact list in the event he may need them. Looking for capital to build a new factory? Carl’s got it. Trying to find an investor for your start up? Carl’s your guy. The only catch is his exorbitant finder’s fee, which usually hovered in the tens of thousands and sometimes even more. Carl positioned himself as the dealmaker, bringing both sides to the table with the hopes of closing a deal.
In the end, we parted ways with Carl and took a more direct approach to finding capital. It took three additional months of networking, cold emails, and pitch meetings, but the party supplies company eventually secured a working capital loan through a regional business development fund—at terms far better than what Carl's investment bank had offered. This experience taught me an invaluable lesson: the most important connections are the ones you forge yourself. When someone positions themselves as the exclusive gatekeeper to opportunity, it's often a sign they're more focused on extracting value than creating it.
For founders navigating the early stages of growth, remember that persistence and direct outreach will almost always yield better results than paying for access to someone else's rolodex. The right partners—whether they're investors, advisors, or mentors—will value your business on its merits rather than viewing you as a transaction. The path to funding may take longer without shortcuts, but it builds authentic relationships that serve your business for the long term. And that's something no "professional networker" can sell you.