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VCs nearly always minimize risk by going with entrepreneurs whom they know or who come recommended by someone they trust. Years before he founded MyPunchbowl, Douglas started attending entrepreneurial networking events in the Boston area. Through this connection he met McQuilken of Intel Capital, who in turn introduced him to other investors. "VCs are easy to get to know," says Bell of Highland Capital. "It's our job to give away money. I spend a lot of time talking with entrepreneurs, executive vice presidents at companies who might one day go out on their own, lawyers, consultants - all these people are your network. Say you currently work at ABC Co. but would like to start your own company someday. Call and say you'd like to pick my brain. I'll tap someone like you to help me do due diligence on an investment that interests me. And I'll remember you when you do start that business."

NEXT: ...but don't oversell it
LAST UPDATE: Apr 21 2009 | 10:57 AM ET
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