Blog Post

Freemasonry, Lost Art of Founder-Networking

Ever lament the fact that you don’t have that coveted Harvard/Stanford/Wharton MBA? Sure, such emblems open doors, but there are plenty of calling cards and networking organizations that can help you get access to marquee investors. In fact, some of these networks have been around a long time — longer even than Harvard.

I recently stumbled upon a post at Paul Kedrosky’s blog under the title Freemasons, and Social Networks in the Markets. In it, Paul asks: “Does being in the right social network mean an easier time getting credit?” (Just guess.) Apparently Paul read an interesting new paper that looked at whether, historically, Freemasons favored their fellow entrepreneurs when it came to funding. (Guess again):

…Using a unique data set of 410 companies quoted on the London Stock Exchange between 1895 and 1902, I find that Masonic managers were associated with greater access to credit in small and young companies whose securities where traded over the counter. These companies earned higher profits, but the effect is not statistically significant. On the other hand, large publicly quoted corporations that were managed by Freemasons did not obtain greater access to credit; they had lower profits and lower Tobin’s Q.

We call this syndicate behavior. Sequoia, Kleiner, Accel certainly subscribe to it. Heck, Kleiner even marketed this strategy once. They called it Keiretsu. And just this mere hint at “Masonic tradition” casts me back to hushed breakfasts with NEA on the 3rd floor of the old Park Hyatt Hotel in San Francisco. Or those curiously-long VC lunches at the “Sun Deck” on Sand Hill Road (Sun Deck. Star Chamber. I’m not sure, but the food sure wasn’t the draw.)

I know you know there is a Venture Mafia. But this doesn’t mean you can’t get access to it, without Ivy; without white shoes. OK, you might have to wear a funny robe now and again. But the Freemasons really take care of each other — they’re about apprenticeship, personal development and craft-mastery. (Sounds a lot like Stanford entrepreneurship courses.)

Once in a while there may be “blood penalties”, but at this point, that’s one more small risk in the mix when it comes to getting your shop funded. And as Kedrosky’s passage points out: Freemasons pay each other more, too — even if statistics show that mason-managers don’t last in mature business (again, just like a lot of founders).

structure_of_fm.jpg Passion, dedication, sacrifice. I’m telling you, Freemasons may be founders’ original peeps. (Just look at this org chart and tell me these guys aren’t engineers!).

We think you should consider this, especially if you don’t have and MBA. Membership is apparently open to anyone.

For more information, read:

* Freemasonry and Its Etiquette, by William Campbell-Everden.

* Masonic Enlightenment – The Philosophy, History and Wisdom of Freemasonry, by Michael R Poll.

* A New Encyclopaedia of Freemasonry (Ars Magna Latomorum) And of Cognate Instituted Mysteries: Their Rites, Literature and History, by Arthur Edward Waite

* Complete Idiot’s Guide to Freemasonry (available via Kindle!) by S. Brent Morris, Ph.D., late of Duke and Johns Hopkins Universities, currently at George Washington University.

* The Da Vinci Code, By Dan Brown

One Response to “Freemasonry, Lost Art of Founder-Networking”

  1. Anyone looking on Freemasonry as a clique to be part of to further ones self is really the last person I’d want to know through the craft, selfish motives aren’t really conducive.

    Bit spurious citing research that it’s historical in all senses, in those times much was done on trust so it’s pretty obvious that fellow members of a highly moral society would possibly trust each other more when it came to credit, don’t you think? It wasn’t about access to those holding the purse strings, it was about a demonstrable moral fibre backed up by a social graph of the masonic brotherhood. That moral solidity was born out in that quote where it shows masonic managers are essentially a more conservative bunch, a safe pair of hands in that context. The world has changed an awful lot since 1902, no?

    Keiretsu is about interconnections, if I remember my Japanese business culture 101 it is kwanshi (spelling?) that relates most to the above analogy, it’s trust basically. The way business is conducted on trust and ones honour rather than by proscriptive contractual discipline. You build an honourable reputation through excellence and thereafter conduct yourself in the service of your own or your employers good name.

    In short, don’t become an Freemason to gain access to funding or people do it out of curiosity, a love for learning and to be part of an ancient society.