For the VCs doing seed and series A, how are you looking for companies?
I do series A-C and we almost exclusively use crunchbase/pitchbook, go through the YC cohorts and then maybe look at G2 product pages, but that’s about it.
I’m assuming that seed investors are mostly relying on the network of the GP, but are there any other ways to source these early stage startups?
Be honest, your fund's returns are dogshit right? The biggest source of alpha in early stage investing is proprietary sourcing, there's no way sticking to the same channels that I (an IB analyst) use gives you an edge.
We don’t do early stage investing (see: series A-C) and basically every company that raises seed or series A from a credible VC will be in CB/PB. Most of our investing is series B+ and we have well connected higher ups to help us get into rounds.
How are you defining “proprietary sourcing”? What I’m curious about is how the seed investors writing the first check find founders beyond inbound from their network. Is there anything else they do?
Returns are “ehh” FWIW. Definitely not dogshit but not top quartile right now.
highly disagree - you are clearly not a VC . No such thing as proprietary deal flow lol
Best deal flow comes from late-stage founders. Dial in with them, and they will help unsurface exciting early-stage founders.
Congratulations, you just described proprietary sourcing.
Based on the most helpful WSO content, here are some strategies for sourcing seed and Series A stage companies:
Leverage Awards and Recognitions:
Track Startup Funding:
Utilize the SEC's Edgar Database:
Networking Through Vendors:
Accelerators and Incubators:
Portfolio Companies:
Co-Investor Relationships:
Industry-Specific Forums and Discussions:
Remember, while using tools like Crunchbase and Pitchbook is common, it's also important to actively engage with the startup ecosystem through networking, industry events, and maintaining a strong presence in the communities where startups thrive. Seed investors often rely heavily on their networks, but these additional methods can complement and expand their deal sourcing capabilities.
Sources: Your best sourcing tips, Want to build a startup & raise some money? Part II, VC startup idea - PE or VC interest? Are these numbers viable?, Want to build a startup & raise some money? Part I, VC Sourcing (Healthcare)
Depending on if you're sector focused or not, tap in with founders. They usually hear about other founders and upcoming startups, and the best part is that it's "proprietary". I would also encourage just going to ground at a lot of conferences, online Twitter (sorry, X) communities, and innovation folks at corporate firms that would partner with these earlier startups.
Just using pitchbook and other public databases is yikes, no offense. Not a lot of alpha there. Plus if founders aren't directly reaching out to your GPs about rounds, chances are you're not getting into very competitive deals.
:)
doesn't get any stupider than skipping your mother's funeral to work on pitchbooks, troll. GTFOH
:)
If you are from eurazeo, or another european fund you have my sympathies :)
What's up with you an Eurazeo in every thread. Sounds like a juicy story
The best deals will always come through your network, most often referrals from other VCs and a handful of credible KOLs. Many VCs will have regular calls with other VCs that they like to work together with, and share dealflow. The most successful VCs know their markets and key executives, and these are often who will become founders of new ventures (in B2B, consumer is a bit different). The best founders also tend to be serial entrepreneurs, and they typically have established investor relationships that percolate through your network. I've also seen some creative sleuthing using LinkedIn data, hunting within incubators, crashing hackathons and engineer meetups, and making friends with IP-transfer offices (in the case of deep tech).
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