Of HEC's 65 members, some 60% to 70% are company presidents and/or owners -- around half of them women. According to bylaw, no two companies compete directly with one another; otherwise, new applications are voted on by the full body. After a onetime initiation charge of $200, members pay $50 a month in fees for the breakfast series, small change compared with the dues at TEC or SoCalTEN. Besides the food, HECers thrive on a steady diet of motivational oratory, educational supplements, and leads, glorious leads. Unlike such ephemeral benefits as education and motivation, leads are easily quantified -- and quantified they are. Whether a direct sale, hot tip, or decent job prospect, each lead earns a public "thank you" and goes down on Harris's ledger, to be tallied and read aloud at the meeting's end. On one random Tuesday in March, the weekly number came up 309.
So the group clearly earns as it learns. Says Harris, "If you're an HEC member, the presumption is that you're a good risk to do business with. You can shop outside the network [for similar services] -- it's OK to do that -- but there's seldom much reason [to do so]. You don't want to make a client unhappy when you know you'll be seeing him over breakfast next week."
Just off the turnpike between Boston and Route 128, a different sort of network breaks bread in the function room of a local motel, professing another form of faith.
"We're looking for about half a million dollars in bridge capital, and we need it within the next 60 days," says the head of one small technology concern. "If we're the company for you, call soon. We would be real happy to talk. Also, we have an opening for a senior financial officer. Must be able to relate to engineers in blue jeans."
"I've been a CPA since the 1930s," confesses another, cordless mike in hand. "If any of you get to sufficient size [in sales], call me up. I'll guarantee your company millions of dollars a year in savings. Unconditionally."
The two men glance up from their respective tables and smile at a third, an unemployed operations manager from Vermont, who is offering his house for sale "to anyone who feels the need to balance his portfolio with unproductive assets."
Like most of the several dozen venture capital clubs scattered across the country, the 128 Venture Group is a civilized (and humanized) meat market designed to pair investors up with capital-hungry companies. Launched in 1983 by Michael P. Belanger, a consultant and venture capitalist himself (Belanger also runs similar groups in New York City and Baltimore/Washington), the network works on a combination low-fee ($20 a session), high-turnover basis.
"About one third of them are new every month," says Belanger of his constituency, "although we have a lot of people who cycle through here once a quarter or so. The success stories tend to go away and not come back."
Belanger started his network at a time when market conditions had produced a venture-capital surplus in Boston's high-tech backyard. Old-school investors were seeking young start-ups outside the normal channels of commerce, explains Belanger, and he sensed that the time was ripe to get the players together more formally -- as well as to seek good investments himself. His exposure to other venture-capital clubs convinced him that the more local these groups stayed -- "networking is not really interregional," he maintains -- the more effective they would be. As for the tone of the meetings, well, at least he knew some things he didn't want to do.
"I belonged to one club that charged $250 just to get in the door, and that's way too much," he reports. "Plus, they held luncheon meetings, and lunch tends to get a little boozy if you don't watch out. I didn't want a Rotary Club atmosphere, I wanted one where business gets done."
Belanger estimates that a minimum of one solid venture deal a month does get done now, not a bad yield under tightening market conditions. The rest of the action is mostly job-hunting and listening to selected outside speakers. "A lot of [executives] simply use this forum for reality testing," he observes. "You know, you stand up and tell the group who you are and what you're about, and that connects you to something. I'm not always sure why, but it works. It does work."
There may always be an element of mystery to why the networking process works, but groups like SoCalTEN are analyzing the variables with an attempt at scientific precision unknown in earlier times. Why them, why now? Are the times really that different?
"They are out here," declares Steve Panzer, SoCalTEN's co-founder and executive director. "The days of the rugged, individualistic entrepreneur are over. Welcome to the age of collaboration."
Panzer, with a PhD from UCLA and a background in strategic planning systems and management consulting, is no dreamy academic. His first instinct, when he helped start the network, was to poll his constituent companies for the issues that most concerned them. What he learned helped confirm his original thesis, which was that old-boy networks have become virtually useless, particularly for high-tech industries. "The five years CEOs used to take [getting their feet wet] has shrunk to three to six months," he maintains. He also maintains that SoCalTEN's "street smarts" are a crucial weapon in the war for market supremacy -- with Silicon Valley, Japan, or any other major source of competitors.
