For some context, I am a junior at a VC fund that does not require sourcing at my level. I spend most of my time doing diligence/market analysis/execution. I'd like to build the sourcing skillset because I think it's crucial if I want to become a valuable asset to the firm. However, there seems to be no "protocol" for this and all I see on Twitter is founders berating VC associates for wasting their time. I want to understand how sourcing works at other firms since I know that for some, sourcing is 75-100% of the associate's job. Additionally, how do you "get good" at it beyond just taking a lot of meetings?
Pretty open-ended question and not trying to "lazyweb," just genuinely looking for guidance here. Would love to hear any general thoughts but here are some more specific questions:
Do you confirm preliminary interest with partners/principals before taking meetings or is it ok to take meetings of your own accord and only ask when it's something you're excited about?
If you have a warm intro, do you reach out directly to CEOs? CFOs? Corp dev?
When you finally get that intro meeting, if you realize that it's something that your partners would not be interested in, do you tell them that? Or do you say that you'll surface it anyway and then get back to them later with a rationale?
Is there any way to not make it a waste of the other person's time if you aren't going to bring it to IC?
Are there any questions or comments that are considered overstepping or rude? I've seen my partners ask directly about funding plans, other investors, etc. Does an associate have the right to ask these questions?
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Work at a growth shop and spend about 40-60% of my time sourcing
We are 100% "bottoms-up," occasionally somebody senior will say "hey this industry could be interesting" but in general nobody tells me where to source. That said, if something obviously doesn't fit your firm's mandate or past experience (e.g. you won't touch hardware and it's an IoT company), yeah don't waste anyone's time
Yep, I do a fuck ton of cold outreach, there's a bunch of platforms like Yesware, Mixmax, Apollo that can automate follow-ups. I try for the CEO / CFO / COO, at venture-stage they won't have a corp dev team
Yeah, just say on the spot if it's a kill. Nobody is going to be that devastated after only knowing you for 30 minutes
Be transparent as to why it's a kill and offer feedback that's rooted in the business model / data. 80%+ of the time they'll say "Yeah, we're aware that's an issue and working on it" but occasionally you get to tell someone something they never knew about their own company, which is very satisfying and helpful. Also if you know other firms that would do the deal, offering an intro is hugely value-add
I don't know why those questions would be overstepping. Ask whatever you'd need to get the deal done.
Very helpful, thank you!
Asking for any non-public information feels like overstepping to me, which sounds stupid but I think it's the former banker in me lol. Still trying to get over the "shut up and do your monkey tasks" vibe
90% of people understand that asking for basic financial data (ARR, growth rate, burn, amount of preference in, etc) is table stakes. If they push back I usually say something like “our firm usually looks at opportunities of X size growing Y% or more YoY” and you can at least get an indicator. Not sure how well that method would scale down to early stage if you all don’t screen as much on metrics
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