You're interning at a Venture Capital firm. What's the best way to learn about deal sourcing?

The best way to learn about deal sourcing while interning at a Venture Capital firm is to immerse yourself in the industry. This involves staying updated on market trends, networking with industry professionals, attending relevant events, and conducting thorough research on potential investment opportunities. Additionally, seeking mentorship from experienced deal sourcing professionals within the firm and requesting to shadow them during their sourcing activities can provide invaluable learning experiences. Embracing a proactive and curious mindset will also enhance your understanding of deal sourcing processes.

Network actively: Engage with entrepreneurs and VCs at industry events. Conduct research: Use platforms like PitchBook to track rising companies. Learn by doing: Join due diligence sessions and observe pitch meetings. Explore the portfolio: Seek introductions through existing investments. Seek mentorship: Learn deal sourcing strategies from seasoned investors. Stay curious and always be on the lookout for new opportunities!

The investment criteria for your firm is not just the KPI thresholds that are often put on the website or in email signatures of partners, but the mandate passed on by LPs. The KPIs are a way to represent them to capture most of the relevant opportunities. Therefore ask around as frequently as needed about circumstances under which exceptions to each criteria could be justified. Thereafter, look for the “relevant sample” of companies (those that meet your criteria and have been invested into by comps). Understanding these businesses will prepare you to look for the right types of businesses.

Familiarize yourself with the specific investment criteria of your firm. This includes industry focus, stage preference (early-stage, growth-stage, etc.), geographic considerations, and other key factors that influence investment decisions.

Working on top of the funnel is the most fun and many would argue, the most impactful part of the VC stack. Plus as an intern, you're being compensated to build your personal network off the brand of the VC fund - so cool! Since most general partners are too busy and too senior to attend many events (IRL and virtual), make that your superpower. Then cultivate relationships with other interns and associates at other funds to share deals and get feedback on them.

Don’t only go to the obvious events and dinners to source deals. That won’t happen. Focus on a few key relationships and nurture them. Host your own mini events. Lead don’t follow.

Be both creative and flexible when it comes to your approach to deal sourcing. Be willing to try the avenues that other members of your team don’t have time for or can’t get to (i.e., if your team is remote and you live in NYC, attend the industry events and mixers that they physically can’t show up to). This sets you apart but let’s you throw yourself into the industry. Tap into virtual and in-person pitch competitions and showcases. They’re rife with deal flow and you can directly contact the startups that interest you and the firm. If there’s a founder you click well with, don’t be afraid to ask them if they know of other founders who are raising that you should be talking to.

An intern can source deals through various avenues: 1. Joining business plan competitions within college entrepreneur cells or inter/intra-college contests. 2. Networking with alumni connected to incubators, accelerators, venture studios, VC firms, or Corporate VCs. 3. Building a micro-community of startup founders via Meetup.com to host pitching sessions and gather insights. 4.Attending startup festivals to explore early-stage startups. 5. Participating in industry-focused workshops, seminars, summits, and conferences, often organised by financial institutions and regulators. 6.Engaging with Tie.org and similar forums, or attending global chapter meetings for networking and deal sourcing.

Best Deal Sourcing happens when diligence and team performance can happens in parallel. So its important to foster collaboration with startup ecosystem events, understand founders working model and business ethics better as ideas changes but team is what remains constant. Also make sure to offer help to early-stage companies by mentoring, resources - fosters trust building leading to lasting business relationships.

Mastering deal sourcing involves a hands-on approach to understanding startups. Beyond basic due diligence, immerse yourself in the startup's ecosystem. Engage with founders, use their products, and analyze user feedback. Assessing a startup's potential goes beyond numbers; it's about seeing their real-world impact and fit within your firm's vision. Leveraging unique insights and firsthand experiences can differentiate promising ventures from the crowd

In VC, due diligence is key—analyze startups’ models, market fit, and traction critically. Employ tools like CapIQ for financials, Crunchbase for industry positioning, and direct interviews for unfiltered insights. Identifying outliers requires comparing these specifics against our investment framework and sector benchmarks. The goal: find startups with scalable potential and a solid value proposition.

Use various resources such as industry reports, market analysis tools, and databases to research potential investment opportunities. Conduct thorough due diligence to assess market potential, competitive landscape, team capabilities, financial health, and scalability of the business.

1. You should source deals based on the investment criteria of the fund. 2. Maintain a CRM to create a Investment qualification funnel to let startup navigate through various stage of selection process. 3. Record interviews with fireflies to take notes and analyse to put into brief summary in CRM 4. Investment interviews questions should be very well drafted to gather as much as information in order to analyse the fitment with investment thesis of fund 5. Provide feedback to founders in writing with suggestions to build a rapport to reconnect if you found it relevant. 6. Create a one pager for internal deal evaluation team based on information sought.

Pitch effectively by summarizing opportunities with key metrics and rankings based on fit, potential, and urgency. Present to mentors for feedback and approval, focusing on actionable insights and alignment with firm priorities.

Develop strong pitch materials to present potential investment opportunities to your team or investment committee. Prioritize deals based on alignment with your firm's investment thesis, growth potential, risk factors, and expected returns.

Go deep into specific technical problems or market opportunities, even if you are a generalist. It is exceedingly easy to get caught up in the latest market buzzwords and technical fads, but without a deeper understanding you'll be pulled in unprofitable directions. This doesn't mean you need to get a Ph.D. or have ten years of experience in an industry, but spending some evenings watching YouTube videos or reading trade journals can give you an edge.

Continuously learn from both successful and unsuccessful deals. Understand the reasons behind investment decisions and gather insights to improve your deal sourcing strategies. Stay updated on market trends, emerging technologies, and industry disruptions.

Sourcing can be tiring! The most important thing is to find ways to enjoy the process and figure out if it might just not be for you. Meeting with founder after founder and learning about different markets and products can often be a grind. If you spend more time sourcing deals in a sector that you enjoy (for example, gaming), you will likely be able to put more time and effort into it, and come out feeling more fulfilled. The hours are long in these kinds of roles, so make sure you enjoy what you’re doing!

Have fun while being curious. Ask around for help as a first step and ask many many questions. Then when sourcing the deals be genuinely interested in the companies you find and this will benefit you once you talk to these companies in a call. Nothing is better than talking to someone who actually cares, and nothing is learned faster as things that really drive us.