What 5,500 Start-ups Reveal About Why Entrepreneurs Win

For many entrepreneurs, networking sits in an awkward category: important in theory, questionable in practice. Founders know they are supposed to do it. After all, start-up ecosystems are built on the premise of rich networking opportunities: there are plenty of pitch nights, accelerator demo days, co-working spaces, founder dinners, Slack groups, investor events, and industry conferences. Everywhere you look, entrepreneurs are being told “to connect”. But when you are trying to build a product, attract customers, hire talent, and survive another month of runway, networking can feel like a distraction – superficial, forced, and with impact that is hard to measure. Entrepreneurs often wonder: does networking actually help a start-up grow, or is it just another piece of start-up theatre?

Based on quantitative and qualitative data on more than 5,500 technology ventures collected in partnership with ScaleX, Professor Anne ter Wal (Imperial Business School, London) and Dr Rand Gerges-Yammine (ESCP Business School, Paris) conclude there is compelling evidence that networking matters a great deal for startup growth. Entrepreneurial networking in the early stages of venture development is a powerful predictor of venture growth further down the line. 

ScaleX is a start-up-rating agency that combines in-depth human evaluation of start-up growth potential with AI-supported analytics. Its proprietary model evaluates ventures across 26 criteria and is trained on historical data from both successful and failed start-ups to establish patterns that link early-stage observables to future start-up growth. To understand what drives differences in growth potential, we first analysed how networking-related criteria compare to the other quantitative evaluation criteria used by ScaleX to predict start-up growth, and then took a deep dive into interview transcripts of top-ranked and bottom-ranked firms in terms of growth potential and realised growth to better understand what effective networking looks like. Two networking-related factors stood out as particularly predictive of venture growth: “network relevance and reach” and “the ability to convince” were, respectively, ranked fifth and seventh out of all 26 criteria in terms of their predictive power of venture growth.

Network relevance and reach
Many entrepreneurs assume that the bigger the network, the better. Our findings suggest otherwise. What matters is not how many people entrepreneurs know, but how relevant connections are and how far they reach. A high-quality network is defined by both the variety of connections and their potential to become active supporters of the venture. Such a network gives early-stage entrepreneurs access to the people who matter for the business — prospective customers, investors, mentors, advisors, and partners. Our data show that startups receiving the highest score (5 out of 5) for the quality of their business network, in terms of connection relevance and reach, were 1.8 times more likely to be top-rated for commercial traction 24 months after the initial rating, compared to those with a low business network score (below 1). This matters especially in the early stages. With limited financial metrics or concrete milestones to show for, a young startup’s credibility can be greatly boosted by the quality of its founders’ connections. When startups lack strong financial proof points, an entrepreneur’s network can signal credibility and open doors that would otherwise remain closed.

Ability to convince
The “ability to convince” score in the rating methodology reflects the entrepreneur’s ability to convince others of the quality of their business idea and thus is a critical component of their networking ability. Our rating data indicate that start-ups receiving a top score in the “ability to convince” criterion (on a 5-point scale) had 3.2 times greater chances of gaining strong commercial traction two years later, compared to those with a low ability to convince score. The founders’ ability to convince determines whether an early investor conversation turns into funding later, whether early interest becomes a partnership, and whether a pitch leads to sales. Without it, even strong networks remain underutilized. The” ability to convince” effect is striking because it operates largely independently of more traditional factors such as market readiness or the innovativeness of the idea. In other words, success is not only about what is being built, but about how convincingly it is communicated.

What entrepreneurs effective at networking do differently
Our research suggests that networking does matter. A lot, in fact. But probably not in the way many entrepreneurs think. Many entrepreneurs get networking wrong. They treat it as a low-priority social activity, or worse, as purely transactional, rather than as a core capability that can drive growth. But this is not a fixed limitation. The good news is that every entrepreneur can become more effective at networking. Based on the entrepreneurs in our data who performed best, three approaches stand out.

• Show up and do the work

One common pitfall is assuming that being based in “high-buzz” locations such as London, Paris, or Silicon Valley automatically creates opportunity. Do not just exist in an ecosystem, engage with it. You need to put yourself out there: join the communities that are relevant to your business, attend events consistently enough for people to remember you, apply to become a speaker at events. What will set you apart is showing up, not just once, but repeatedly. Networking only pays off when you move from passive presence to active participation to convert ecosystem access into actual opportunity. It not only galvanizes opportunities to build network reach, it also provides an opportunity to subtly hone your ability to convince.

• Expect the Unexpected  

One of the biggest networking mistakes is treating every interaction as a transaction: if you cannot get something immediately, the person is not worth your time. When networking, be open to the unexpected. People can sense when your focus is only on what you can extract. The most effective entrepreneurs in our research instead stayed open to the unexpected: paradoxically, they built a wide web of relevant connections without being overly directed and instrumental in their initial networking. Instead, they focused on building genuine, long-term relationships before asking for anything in return. Engage with people outside your immediate circle, even when there is no obvious short-term benefit. That patience pays off and connections that seem irrelevant today can become pivotal for your startup tomorrow. 

• Convince, Don’t Just Connect

Many entrepreneurs assume that convincing others is about pitching harder or sounding more polished. In reality, people push back when they feel they are being sold to. The ability to convince when networking is not performance but rather the delicate art of making others understand, trust, and back your startup. It is also not something you are born with. You build it through practice. Every conversation is a chance to refine how you explain your business. Pay attention to how people react. What resonates? What falls flat? Entrepreneurs who improve fastest are the ones who constantly adjust and sharpen their message. Storytelling is one of the most powerful tools here. The most effective entrepreneurs do not just present facts, they make their startup relatable. Opening with a personal story can capture attention immediately and make people care. Over time, this process of testing and refining how you communicate and tell your story becomes a real advantage. It is what allows you to move from simply stating your idea to actually convincing others of its potential.

The bottom line
Networking should be treated like any other entrepreneurial capability. It is not innate, nor reserved for a certain personality type. Rather, it is a skill that improves with practice. Entrepreneurs should learn to network by doing — engaging in conversations, testing how they present their ideas, and refining their approach based on feedback. Those who invest in growing their networking capability early on are more likely to build ventures that gain momentum and grow, rather than stall, later on.