What actually drives the world of venture capital

Abdulaziz Yakubov, Tashkent City, CEO of Yoshlar Ventures, LinkedIn

In the world of venture capital, networking serves as a crucial tool for identifying the most promising projects, securing their funding, and accelerating business growth.

Successful venture investors are not merely those with the largest number of personal acquaintances, but rather those who cultivate professional relationships with a long-term perspective. They dedicate their time to helping entrepreneurs, attracting experts capable of testing ideas, and becoming trusted partners to other investors in the field, long before investment terms are even discussed.

This process is not a one-time agreement; it is a partnership whose value grows over time. A simple conversation today can pave the way for meeting the right person next year, provide guidance that steers a startup founder in the right direction, or help assemble a strong investor team to rescue a project in difficult circumstances.

Let us take a brief look at history. In 1973, a young sociologist named Mark Granovetter expanded our understanding of opportunity. He was seeking an answer to a very simple question: How do people actually find jobs? The conclusion was unexpected: for most people, it was not close friends or relatives, but rather mere acquaintances, who provided the most help in finding new employment.

We believe that connections established with unfamiliar people ensure higher growth potential than the value provided by those close to you. For Yoshlar Ventures, networking is not just about making contacts, but a strategically planned development roadmap.

Research-based networking

For years, competition among venture funds was built solely on personal connections. A prominent name and a broad network of acquaintances granted access to the circle of the best projects, which constituted nearly half of success. Its modern version today has changed its form.

Currently, a group of investors is gaining an edge through deep market knowledge. Their goal is not merely to invest, but to become the most knowledgeable investor a startup founder encounters. Therefore, some leading venture firms are even hiring former journalists to operate based on thorough analysis. They conduct interviews with customers and industry experts from the very first meeting, studying the project inside out. This approach yields excellent results, especially at the Series B stage and beyond. At this point, there is sufficient data for analysis, and founders present their projects to investors who truly understand the business, rather than those engaged in superficial conversations.

There is a pertinent historical comparison here. Our great ancestor, Amir Temur, never marched into unfamiliar territories blindly. Behind every one of his victories stood, first and foremost, a careful plan and intelligence reports brought by merchants and spies. Before a single soldier set foot on the battlefield, the terrain’s map and the political situation were studied thoroughly. The seemingly easy victory on the field was actually the result of such extensive preparation. Today’s most astute and diligent investors operate in the same manner. They thoroughly study the market, customers, and weaknesses in the pitch before even arriving at the first meeting. As a result, the conversation becomes not a one-sided presentation, but a sincere and meaningful dialogue between two equal partners.

An ancient method in a new era

At the same time, none of this would have been entirely new to a merchant in Samarkand or Bukhara eight hundred years ago. Long before the word "networking" was coined, the cities in the territory of modern-day Uzbekistan served as a living infrastructure for exactly this.

The Great Silk Road was not just a trade route, but a vast network of trust passing from city to city and caravan to caravan. Merchants would unhesitatingly entrust their goods to people they had met only once in their lives, perhaps never to see again. This was possible because someone somewhere in this chain was always ready to vouch for another merchant. All of this worked thanks to a carefully thought-out system and mutual trust built over centuries. The trust system that venture investors are currently seeking and rediscovering was, in fact, already invented by Central Asia, where people have lived within it for centuries.

The modern part of this story is being written right now, and the numbers clearly demonstrate this.

Financing for early-stage startups in Uzbekistan grew from $300,000 in 2020 to $99.3 million by 2025, representing an increase of more than 230 times over four years. In 2024, the country produced its first "unicorn," the Uzum company. Currently, more than 12 active venture funds operate in our country, with their total capital exceeding $136 million, having increased tenfold over the last five years. In the 2026 StartupBlink global ranking, Uzbekistan showed the highest growth among all countries, taking the 1st place worldwide.

Of course, these results did not appear simply through the self-development of good ideas. Behind them stands a sturdy bridge built intentionally and supported by someone.

Secrets of the bridge builder

We consider "Yoshlar Ventures" not just another investment fund, but a system united around a strategic idea. There are many young people in our country capable of building strong and promising startups. The main difficulty, however, was gathering the investors, mentors, and institutions that support them in one place. Yoshlar Ventures was established to fill this gap and pave the way for young founders. Although not much time has passed, it is handling this task excellently. For example, they were the first to bring Yale and Cornell professors to Uzbekistan, as well as some of Y Combinator’s top startuppers. Upcoming plans also include visits by representatives from prestigious institutions such as MIT, Harvard, and Stanford.

How are they able to attract such world-class individuals to Uzbekistan?

The answer is simpler than you might think: trust..

So, where did this trust come from? The Yoshlar Ventures team, together with the Agency for Youth Affairs, personally visited these universities in the United States, engaged in face-to-face communication with those there, and established sincere and strong connections. In this process, the Uzbek diaspora in America also played a very significant role.

This itself is a vivid example of research-driven and purposeful networking. Thus, the conclusion is singular: cooperation based on human trust is not new to us; it is in our blood. By placing this trust mechanism, which has functioned for centuries, into modern molds, we can multiply our achievements several times over.

As mentioned, the most effective direction in communication today is a targeted and personal approach. We observe this frequently in our own events: general invitations sent merely via email are almost ignored. However, if we contact each person individually, make a phone call, or send a personal message, the result is completely different.

We do not consider ourselves merely financial aid providers, even if sometimes our role seems limited to just investing. Venture capital is often called a "relationship-based business." However, it is important not to forget that relying on absolute and blind trust is dangerous for any field that requires objective decision-making.

There is also a very interesting conclusion in Anthony W. Richardson’s study titled "Success and ROI of Cold Deal Flow Companies versus Warm Deal Flow Companies." According to the research, the success rate of individuals coming through "cold" and "warm" networking is nearly identical: businesses with warm connections have a marginal advantage of less than 2%. However, the process changes completely regarding the scale of success and profitability; in terms of final results and total revenue (exit size), companies originating from cold connections emerged as the winners.

Most notably, companies founded by individuals who came without networking connections spent approximately 18% less capital, while their average ROI growth was 16.2% higher.

This is because they arrive without any recommendations or acquaintances. This indicates that the founder has no supporting connections behind them, meaning they cannot hide behind warm relationships. Under such conditions, only a genuine project, strong results, and pure talent become their sole weapon.

Conclusion

It is easy to think of networking merely as acquiring contacts, but it is not so. Evidence proves this, from Granovetter’s sociology to Amir Temur’s strategy and the ancient caravanserais of Samarkand, all showing the opposite. Networking is not just a part of value creation and financing. It is one of the core mechanisms of this process.

Today, software performs market analysis and complex calculations faster than any specialist. As analysis becomes cheaper, one thing remains absolutely unchanged: human trust. The decision of which founder to entrust one’s company to, or the final decision to close a major deal, is still made by living people, relying on sincere relationships.

For Uzbekistan, this is not a new or foreign concept. This land has known better than anyone for centuries that great deeds and trade move only through mutual trust. Today, the principles taught in venture capital, modern accelerators, or the audiences of Yale and Cornell are, in fact, the return of values rooted in our past to their modern home.