There’s a popular saying in tech: “First time founders focus on product. Second time founders focus on distribution.”

The point is this: even if you make the most compelling, revolutionary product on Earth, if nobody knows about it, it goes nowhere.

Capital is important. But great founders seek out investors that also bring wide distribution.

Reach = impact

Over the past ten or twenty years, founders flaunted their investors to signal why partnerships should happen, why the media should talk about their product, and why customers should give them their money.

Today, all those considerations can be collapsed into a single strategy if you leverage investors with widespread distribution—a vital step that accelerates your product and places it in as many of the right hands as possible. If your investors can activate their networks, everything else will follow.

Individuals have more reach than ever before

Before individuals had hundreds of thousands or even millions of followers on platforms like Twitter, founders would pursue the biggest firms with the most sparkling pedigrees; Sequoia, Kleiner Perkins, Union Square Ventures, Andreessen Horowitz, and the like.

These organizations are run by brilliant people; there’s a reason they’ve gotten where they are. In recent years they’ve been creating media arms as a means of spreading the word about their projects.

But they’ve been creating those media arms because no single investor had a personal following that garnered more reach than traditional media channels.

That’s changed, and with it what it means to be an “investor.”

Why you should prioritize distribution over capital

The definition of an investor has expanded. Anthony Pompliano—or Pomp, as his million Twitter followers know him—doesn’t meet the criteria of a classic Venture Capitalist (VC). But he is a prime example of this new investor archetype, one with incredible reach.

He may not be able to summon the capital of a traditional world-class firm. But with a few keystrokes he can put your product in front of a million people. What’s more valuable?

The more that capital becomes a commodity, the more powerful this kind of reach becomes.

Conversation is capital

This transformation is already happening. Some companies are putting twenty investors on their cap tables, and they all share one quality: reach.

Each of them can talk about their holdings on Twitter. Every idea they bat around in the public sphere wins mindshare and promotes your product. Every statement, every piece of content, raises their standing, extends their reach, and makes them more valuable as an investor.

Garry Tan is one of the most successful investors ever. He co-founded Initialized Capital. He invested $300,000 in Coinbase in 2012. Those shares are now worth 6000x.  

But what’s more impressive is that, despite this stratospheric success, he’s out there hustling YouTube content almost every week, like a young, hungry kid with something to prove. Why? Because he understands the power or distribution.

No longer will the best investors have the best track records. In the future, they’ll also have the strongest signal and distribution.