3.1 Deal Sourcing in VC
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Deal Sourcing in Venture Capital
Before a VC can pick the next big winner, they need to find it. That’s where deal sourcing comes in — the ongoing process of identifying promising startups that match a fund’s investment thesis.​​
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Why It Matters
Deal flow is the engine of a venture fund. The quality of your investments depends entirely on the quality of your pipeline. Most funds evaluate hundreds of opportunities to make just a few investments each year.
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The best VCs don’t just wait for deals — they build systems to see high-potential startups before anyone else.
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Where Deals Come From
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Common deal sourcing channels include:
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Warm intros from trusted founders, LPs, and other investors
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Portfolio company referrals
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Accelerators, demo days, and pitch events
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Thematic research, blogs, and public investment theses
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Outbound prospecting and cold outreach
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Dedicated scouts or venture partners
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Top-tier funds often develop unique, defensible deal flow strategies — rooted in geography, domain expertise, or founder communities.
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Differentiated sourcing is a competitive advantage.
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Initial Screening & First Meeting:
The Quick Look
Once a startup enters the funnel, the VC will typically conduct a quick screen for fit:
Does it match the fund’s stage, sector, and check size?
Is there strong founder-market fit?
Are there early signs of traction or a compelling vision?
If the answers are promising, it usually leads to a first meeting — a short call where the VC gauges potential, asks key questions, and starts to build rapport with the founder.
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The Bottom Line
Great sourcing is about more than quantity. It’s about consistency, quality, and positioning. The best investors don’t just find great deals — they create the conditions to be invited into them.
Recommended Reading – VC Deal Sourcing
Here are some of the best resources available online to help you deepen your understanding of venture capital deal sourcing:
1. GoingVC – Beginner’s Guide to Deal Sourcing
A strong overview of how early-stage VCs approach sourcing. Covers defining your thesis, leveraging networks, and tools like AngelList, Crunchbase, and LinkedIn. Ideal for emerging managers or first-time investors.
2. Affinity – Deal Sourcing Best Practices
A tactical breakdown of sourcing best practices used by top-tier VC firms. Focuses on CRM usage, relationship tracking, and evaluating inbound vs. outbound sourcing strategies.
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3. Affinity – Improving VC Deal Sourcing with Relationship Intelligence
Explores how firms can leverage network data to discover warmer leads and avoid missing hidden gems. Includes insights on how most top-tier VC deals originate from trusted referrals.
4. Zapflow – Optimizing Venture Capital Deal Sourcing
Covers modern VC sourcing strategies, including how to manage inbound, track outbound, build visibility, and combine tech tools with personal networks to boost pipeline quality.
5. Carta – Understanding Deal Flow: Process & Best Practices
A step-by-step overview of how deals flow through a VC firm — from sourcing to screening, due diligence, and closing. Useful for contextualizing where sourcing fits in the broader investment process.
