Where We Source Deals
Today I share some data on where we source deals. My advice try really hard to meet VC investors through a warm intro. Look for ecosystem builders.
A great question I get asked by lots of founders is - “where do you source your deal flow?”. Understanding how investors find deals can help startup leaders to be more successful raising money. There are three main ways we get connected to the hundreds of startups we speak to each year.
The first and best way is through an introduction from someone we know. This might be from another venture capital firm that we share deal flow with. It can also be from accelerators, other founders, co-working space or tech ecosystem leaders, and former colleagues. 9 of the 13 deals we have invested in came to us this way, and 40% of the quality companies we have met had a warm intro.
The second way we find deals is by seeing some type of press or info on the company and then we seek them out. This might be an article about the company or a podcast appearance. We sometimes see interesting companies on crowdfunding platforms, or their executives might be speaking at a conference. 3 of our 13 investments came this way, and these companies make up 45% of our quality watch list today.
The final way we get deal flow is through cold inbound. Founders fill out forms on our website, fire into our generic email box, or hit us up on LinkedIn. This can work, but the odds aren’t great. We have invested in only one deal like this, and companies sourced this way make up only 15% of our watch list.
The bottom line is try really hard to meet VC investors through a warm intro. Find people that can help you do this in your local community or industry. Look for ecosystem builders at accelerators, non-profit, and tech industry groups. Also do what you can to get the word out about your company. Say “yes” to as many speaking engagements, interviews, and podcasts that you can. Share info on your company with key influencers in your industry vertical and do blog posts when good things happen for your business. It’s OK to try cold outreach to investors, but this should be a last resort after you have tried other strategies with a higher probability of success.
Thanks for reading today's post, I hope this helps you maximize your odds of finding investors.