Startup Funding Espresso -- Sourcing Deal Flow for the Fund

Sourcing Deal Flow for the Fund

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In running a VC fund, you’ll need to set up deal flow sources and run screening processes.

First, set up three to five quality deal flow sources that provide a consistent flow of startups to review.

Maintain those relationships and provide feedback to the deal flow source about what you are seeing and what you are looking for.

It takes more than telling people what you look for, it takes reminding too.

There are a large number of deals seeking funding.

You’ll need to set up a process for selecting deals to review in depth.

Start with basic deal flow criteria around revenue, sector, and stage.

Spend a minute or two on each deal to determine if it fits your criteria.

If it does, then spend a few more minutes reviewing the deal for showstoppers.

For deals that pass the initial screen, set up a call to discuss.

Design an efficient process for meeting startups -- conference calls, local coffeeshop, your office, etc.

If the meeting goes well, ask for a standard set of documents such as a pitch deck and recent financial statements.

Meet with the team to discuss the deal and invite for a pitch to the rest of the team.

Allocate 15 hours a week to deal-flow sourcing, including screening, calling, and meeting new deals.

As soon as you reach a ‘no’ decision, tell the startup so they are not kept waiting.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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