Some ladders are greased to ensure no one grabs ahold

Social Capital: The Powerful Yet Invisible Currency that Maintains the Status Quo

3 min readJul 6, 2020


“Oh, I know someone hiring, I’ll connect you.”

“You’ll pay me back when you’re generating revenue, I know you’re good for it.”

“My friend is interested in your idea, I told them about you. They’re expecting your call.”

The favors, access and value extracted from our network is known as social capital and it’s invisible to the naked eye. This network provides precious opportunities in the form of jobs, ideas, funding, trust, goodwill and more, acting as a form of social lubricant, easing access for the already privileged groups, oftentimes to the detriment of everyone else.

You can’t sit with us

The value wrung from social capital is powerful and contributes to the habitually reinforced structural inequalities in America. It may be an invisible force that can be harnessed for good or evil, but oftentimes, social capital is disguised as good intentions. While these intentions may certainly seem noble, the effects are often exclusionary. Accumulating social capital includes the power to find investors, secure early customers, access influential mentors and so much more. This access amounts to a massive head start that builds into an insurmountable lead over others. It’s unthinkable to ignore the role of social capital in the financial, structural and systematic inequalities that we’re currently grappling with today in our culture and society.

The tentacles are everywhere

Estimates calculate that 85% of job placements are recruited through informal networks, illustrating the power of these vast, far reaching, social capital networks and how deeply they contribute to the systematic lack of diversity across American workplaces. This power carries over from hiring and lands onto the checks that people flushed with social capital bring home. According to research conducted from Florida State University and Northeastern University, social capital is responsible for up to a 33% variance in sales performance. That’s a massive boost for someone’s life to have work opportunities which neatly translate into healthy cash rewards.

Follow the money

These structures tend to perpetuate themselves over generations and across industries, especially in finance. Social capital is deemed “critical” to securing venture capital funding according to researchers. The US Small Business Administration surveys discovered a whopping 75% of startups and new businesses access funding via informal channels of social capital. It is estimated that the sheer scale of the social capital network easily exceeds the entire VC industry. These whisper networks often also play a role in which stocks are traded on Wall Street, the vast majority of investors tend to make their picks because of their network’s influence, not strategic methodologies. These invisible structures are self-sustaining, the effects insidious, elusive and far-reaching.

It’s culturally embedded

New grad Spencer/Hunter/Colt/Insert Privilege Name/ emerges from a prestigious Ivy League school (admission secured by parents, of course!), creates a startup, then recruits his dad’s golf buddies to each become early customers that he can parlay into securing VC funding. Merge this plotline with the numerous research studies confirming that people with resources of social capital are “paid more, promoted faster and promoted at younger ages,” and you’ve got a scenario frequently touted as a unicorn valuation (the air is finally leaking out of those tires so their future doesn’t bode well).

In reality, these startup stories serve to paint a disingenuous, harmful narrative of actual startup life and contribute to the false belief of the meritocracy by reinforcing the status quo and ignoring the precise and deliberate use of social capital. And, we want to believe, because American culture tells us that success depends on an individual person, when in reality, our success is equally dependent upon our relationships with others. No one does it alone, yet, social capital is deployed behind the scenes and continues to be the most valuable currency for most every business, entrepreneur and professional.

Social capital is an invisible machine churning out money and power, removing barriers to entry and greasing the cultural wheels that contribute to systematic inequality and maintaining the status quo.




Business Management & Financial Services Consultant Focused on Development Stage Companies & Microcap Markets