How do VCs find companies?
Deal Flow
- More than 30\% of deal leads comes from VC’s former colleagues and work acquaintances.
- 30\% are from VCs initiating contact with entrepreneurs.
- 20\% are from referrals by other investors.
- 8\% are from referrals by people in the VC’s existing portfolio of companies.
How do VC find deals?
Dissecting the Deal Flow Process How do VCs source deals? They traditionally source deals through personal networks and referrals, although more dealmakers are also utilizing direct deal sourcing tactics.
Where does VC find startups?
The 12 Best Startup Directories & Startup Listing Websites
- Google My Business.
- Crunchbase.
- Index.co.
- Feedough.
- Killer Startups.
- My Startup Tool.
- Alltopstartups.
- Product Hunt.
How do VCS find deals?
VCs have traditionally sourced deals through Personal networks, referrals, and direct outbound research. Through these networks, research, and referrals, VCs source deals and find companies that come into the deal flow funnel and are then screened to see whether it’s a sound investment or one to be left by the wayside.
How does the VC deal flow process work?
The VC deal flow process is powered by the deal origination strategies outlined above. But the problem with this current sourcing system is that most VCs rely almost exclusively on personal networks and referrals to find companies poised as potential investments. If networks fail or referrals are slow VCs may miss out on potential big scores.
How does venture capital deal sourcing and screening work?
Stage 1: Venture capital deal sourcing and screening – Within a year, a mid-sized VC might source and screen anywhere from 200 to 1,000 potential investments. These are typically through referrals from other investors, portfolio companies, or service providers.
Do venture capitalists get more inbound or outbound leads?
Some Venture Capitalists receive more inbound contacts than others, but the fact remains that all must assess high growth prospects and discern whether or not a potential investment could be their next ‘unicorn.’ Usually that process includes reviewing the same set of data sources for new leads and then discerning which leads are optimal targets.