How can you build a strong pipeline of investment opportunities for Venture Capital?

At peak I received over 1,000 submissions a day in VC, which of course is far too many to manage well, particularly 20 years ago, and it was word of mouth. More importantly, we were the first choice for a significant number of entrepreneurs and scientists with high quality deep tech / early stage ventures, which was our target. Those listed here are essential, but the most important factor in attracting high quality entrepreneurs is trust, which requires competency in their business and personal integrity. Unfortunately, trust becomes less important during bubble markets when there is a mad dash for the most capital at the highest valuations before the music stops, but trust is essential for building highly successful, durable businesses.

Call me old-fashioned, but I believe in good karma. Network referrals play a significant role in finding great investment deals. However, it's not enough to merely build a network. Individuals in your network will make good referrals only if they feel that you deserve them. A good way to nurture relationships with founders and other investors is to provide great value to them first. Founders who trust you and have benefited from their relationships with you are more likely to refer other founders to you. Investors who have received a good referral from you are also more likely to reciprocate.

The part I enjoy most in startup investing is the engagement with founders. Having been a founder myself, I can easily empathise and understand other founders' challenges. I enjoy delving into their 'why' to better understand what motivates them to often swim against the stream in an effort to build something new and unique. I find that a 30-minute conversation can reveal much more about a venture than slides, figures, and numbers. Early-stage startups are predominantly about founders, and the best way to get to know them is by speaking to them.

We strategically leveraged LP investing to cultivate a diverse pipeline of startups, viewing it as a symbiotic relationship where our investment fuels innovation. This approach has allowed us to carefully track and manage the intricacies of our portfolio. Each startup is meticulously monitored, with a keen eye on performance metrics and strategic alignment. This detailed tracking ensures that our portfolio remains dynamic and aligned with our overarching investment strategy. It's not just about investing; it's about nurturing and strategically maneuvering within the vast landscape of startups, ensuring each holds a unique place in our carefully curated portfolio.

One of my maxims is that “propinquity counts“. Said differently, when you are with people, things can happen. When you are sitting in your office, reading a book, not much is likely to happen. As Yogi Berra said, when you get to a fork in the road, take it. But to encounter the fork, you have to be on the road. Every breakfast, every lunch, is an opportunity to be with human beings. Being with human beings leads to opportunities. You don’t ask people to dine with you only from time to time. You don’t call people only from time to time. You don’t reach out to connect only from time to time. You reach out ALL the time. That’s not a secret; but it is a major principle. Consistency over time yields rewards over time .

Remember, focusing on the quality and fit of the investment to your portfolio strategy is key to long-term success. Other ideas to add to the mix include: 1. Collaboration with Universities and Research Institutions: Building relationships with universities and research institutions can provide early access to these opportunities. 2. Leveraging Existing Investments: Your current portfolio companies can be a source of new opportunities. 3. Create Feeder or Referral Programs: Encouraging referrals from your network, including other investors, entrepreneurs, and business advisors, can expand your reach. 4. Active Participation in Startup Ecosystems: Being actively involved in startup ecosystems, either as a mentor or advisor.

Other options that could surely be explored are as follows: 1. Be open to cold pitch-deck drops in your inbox. 2. Collaborations with Venture Scouts 3. International Startup handholding and consulting firms. 4. Universities and Technical Institutes’ incubation or startup center 5. Partnering with Research labs and R&D firms or market research firms 6. Funding Events or networking events 7. Referrals and Internal members 8. Industry spinoffs 9. Fellowship programs, Entrepreneurial workshops and sponsorship to similar events 10. Encourage walk-in and pitch-deck drops. 11. Leveraging Social Media platforms 12. Call out to innovative ventures to share their pitch-deck for future rounds of funding.