How do you source and screen the right startups?

This best way to source start ups is through a referral base that you have worked with before and trust. The value of your business network cannot be underestimated. That being said pure startups are a very heavy lift even if they inhabit a high growth sector and have management that has executed significant exits for their shareholders. To have a successful business model you must hedge start up risk with clients that have existing EBITDA and positive net income.

Sourcing early stage opportunities is always a balance of quality vs quantity. It can be quite easy to find a large QUANTITY of startups by looking at lists of startups, accelerator programs, university incubators, etc. Within a day it would be quite easy to find thousands of startups and build out a database. The challenge is to source the RIGHT startups and to be able to identify the highest QUALITY opportunities. After investing in early stage companies for 10 years, the number one way we source startups is through our network. You need to identify the key people in a startup ecosystem and build relationships to get the chance to see startups that they are looking at.

Developing a strong thesis is IMP otherwise you will just move in different directions all the time without reaching anywhere. Strong thesis includes clarity about - - sectors you will invest into - stage of startup like pre seed, seed, series A/B/C/D etc - cheque size like $1M etc - white spaces in your preferred industry - geographies like India, USA etc

Engage with other experts in a clear and constructive manner. Build a network where you demonstrate thought leadership with your investment thesis. Provide resources and information relevant to the startups you are interested in, so that they can see how you would add value to them.

In the intricate tapestry of venture capital, threading the needle between potential unicorns and fledgling startups can be an art. It's more than just money—it's about nurturing innovation. But how can we refine our approach in a sea of potential? Begin with a robust investment thesis—a compass guiding your expedition into the bustling startup ecosystem. Let it be a mirror to your expertise, passion, and vision, while also echoing the market's pulse and consumer zeitgeist. This beacon then illuminates the path, spotlighting startups not just for their valuation, but for their scalability, product-market fit, and disruptive potential. It's a dance of diligence, ensuring your capital is a catalyst for growth.

VC is a NETWORK game, like it or not !! Here, Network == NET WORTH Building good relationships is required for it like - - to get the best deal flows to invest into - to get good opportunities for portfolio companies for future funding and exits - to get a good fundraise from LPs to start the fund - to get good talents to work in your & portfolio company & many more DEAL flow sources - - referrals from entrepreneurs, other VC's, mentors etc - inbound deal like cold message or mail - outbound based on market research

With 4 of the top 14 least affordable cities, globally, Australia will be an interesting barometer for, inter alia, the evolution of how we consume space. With data supporting: - the link between residential PPSM pricing levels and office vacancy levels, - the greater amount of online shopping of those who work from home, + - a 10% rise in the amount of time spent at home compared to 2019 These fundamental shifts will reshape what we used to define as CBD’s or city centres. We are seeing many approaches in market, utilising tech, in making decisions around capital allocation, cap trans decisions and asset management to re-shape decision making. What is clear is there is no one size that fits all to how this is being is approached.

A great way to build your network is to work with the engineering departments, medical schools, or business schools relevant to your thesis. Perhaps you can be an advisor to the president or deans of these institutions. Or maybe you can serve as an advisor or judge for business plan competitions or engineering design projects.

Building a network is about giving back as much as it is about capturing deal flow from that network. What are ways that you can support your network that refers you deals? Ideally you deeply understand your key referrers needs and wants and align to support them in those ways at a firm wide level. However, sometimes its equally as effective to do something as simple as send high quality branded swag and throw great events/dinners. :)

A strong network is built when you are open to exchanging ideas and willing to take steps to encourage the purpose( here, strengthening the Startup Ecosystem). Do not look for money; instead, look for value simultaneously. 1) Be specific about what you're looking for. When talking to people in your network, be sure to be specific about the types of startups you're interested in. This will help them give you more targeted referrals. 2) Be helpful to others. The best way to build a strong network is to be helpful to others. Offer your advice and support, and be willing to make introductions. 3) Follow up. When someone gives you a referral, be sure to follow up with them promptly. Thank them for the referral, and let them know how it went.

Gangnam style hit 1bn+ views -the first ever 1bn view video on YouTube. - YouTube paid $8m in ad revenue from views of his video - It broke the mould for artists in terms of streaming revenue - c.65% of the music industry's revenue is via digital channels - It had 72 views per second until it got to 1bn... One of the fastest ever. One of the main creators now is Mr Beast (207m subscribers) who, produced his version of Squid. In 5 days it got 125m views and the video sponsor increased its global downloads by 41% to 1.4m. One of the areas we think will differentiate realestate in the future, will be the ability to engage with the digitally native

There are various tools for research purposes to develop your thesis & identify startups for Investing like - - Blogs of reputed VCs like a16z, YC, BVP etc - Twitter and LinkedIn posts of people who wrote on VC stuffs - Consulting research reports by VCs and MBBs - Talking to customers and other industry players - Understanding the current macro outlook - startup news forums like yourstory, Inc42, Entrackr etc - databases like tracxn, pitchbook, crunchbase etc

Online tools are great for building your network, and one should be wise enough to pick just 1-2 of the right platforms where they see their audience. The best way to harness the outcome here is to have clarity in messaging and a strong ability to cut the clutter.

In my experience building a data driven VC is essential not only as this culture of trusting the data will force to have a fact based decision making process, it will also help process a lot of information quickly. For instance paid platform will serve data for your KYC process as well as helping structure your data such as notion or similar tool. Moreover, models can be built based on these data points to create algorithms helping weight your decisions.

Attending numerous pitch competitions in person isn't feasible nor scalable, but you might want to review recordings at 2x speed afterward. I watch replays to evaluate the companies, founders, and potential opportunities. If I find a post-event opportunity intriguing, I reach out to the event organizers for further inquiries. This is one method to identify potential deals and diversify your sources of deal flow. Another strategy involves dedicating time to research and track companies and founders through platforms like PitchBook, Crunchbase, WellFound (formerly AngelList), and other similar resources. Additionally, I follow founders' online activities as they navigate through their current ventures and explore future opportunities.

The current #proptech fundraising market has cooled, but this is benefiting the proptechs who successfully raise - with greater support from investors, post-investment. We have been helping clients navigate this new market, and one area is a focus on the Ask + use of funds. Previously, the use of funds was, an area that for some, was less detailed than perhaps optimal. We at The Proptech Connection have developed a number of bespoke tools to help our clients illustrate their spend need and how this can flex, dependent on results. This real-time ability to illustrate knowledge + financial discipline, cuts down materially moving to the next step with potential investors.

VC's gets 1000 of deals but invest in ONLY 10 or so. Creating a good funnel is IMPORTANT in this way - - select startups that matches your thesis - sector, stage etc - first level analysis about their target problem, team, market size etc and select only few - analyse the product of rest startups through metrics - deeply analyse the remaining startups and schedule a pitch deck call with them - detailed due diligence and invest in few of them

"In venture capital, it's more than just finding startups—it's about discerning the unicorns from the herd. The linchpin? A meticulously designed screening funnel. Initiate with a thesis-congruent pre-screen, weeding out misaligned ventures. As you delve deeper, evaluate elements like team dynamics, product-market fit, scalability, and crucial financial metrics. The pièce de résistance is rigorous due diligence, ensuring the veracity of claims and analyzing underlying potential. This structured approach is your route from surface prospects to golden investment opportunities. #VentureWisdom"

Finding, supporting, and partnering with entrepreneur support organizations is key. They do much of the early stage heavy lifting. By engaging, VC can: - identify the best founders earlier - guide startup support to tee up better investments - build a support ecosystem and culture that supports their investment thesis Easy tips: - be a mentor to the startups and the ESO - educate the ESO on you screening criteria - incentivize the ESO with a path to financial participation in success

Once your network has grown, you will end up with many more opportunities than you will want to invest in. You might see 50 companies for one that you will write a term sheet on. So ... best to have a strict set of criteria that allows you to quickly eliminate 90% or so that do not align with your thesis.

VC is a REPUTATION game, believe it or not !! You need to build a very good rapport and support the startups and entrepreneurs selflessly (good karma) During sourcing and screening, communicate with founder's regularly to avoid any misunderstanding and ask for the data needed by you to analyse deeply. Avoid conflicts, dishonesty & bad behavior at all costs.

Communicating in a fact based approach is critical. Use “we” and do not over personify your fund as you will confuse people on whether it is a one person decision or a mature position linked to an investment committee or another governing body. Make sure LPs are not overloaded with data and build one pagers that are made to reinsure and explain where you are where you go and why you took some decisions. One point: relationship between VCs and founders is linked to your communication. It must be crystal clear that some values such as transparency are set and you should be putting boundaries to stay professional, close but available for helping steer the ship strategically.

During the due diligence process, the importance of inclusive, compassionate, and supportive communication is often overlooked. This oversight can be attributed to the influence of sensationalized pitch TV shows where entrepreneurs often feel interrogated by venture capitalists. The reality is twofold: (1) It's necessary to ask critical business-related questions to thoroughly assess the company, and (2) the manner in which you ask these questions matters because entrepreneurs are typically working tirelessly to build their businesses and may have sensitivities. Therefore, practicing mindful communication, fostering trust, and adding value can prove beneficial in the long run.

Always be learning and improving - to refine your approach and due diligence, build your network and pipeline, track key metrics and support your portfolio companies success.

Self-reflection and self-evaluation extend to the domains of deal sourcing and screening. It's crucial to assess one's performance over time - especially for fund performance. For instance, which sectors, founders, or stages have yielded the highest returns on investment? Identify companies that have exhibited significant growth or promising traction, and understand the nature of their success. Additionally, evaluate the types of support or assistance required at different investment stages. Consider the most fruitful networks for opportunities and reflect on your contribution to these entrepreneurs. Determine where you have added value and where improvements can be made.

Your network is key to your growth and consider learning and make mistakes when you are small as time is your rare commodity when you will have a decent deal flow. This is a long run and you have to be aware of your weakness to build a team that helps you cover your blind spots as a general partner.

One thing I've founded very critical is to succeed in Exit. In order to have a beneficiary exit it needs many considerations in different stages: Investment thesis, sourcing, ...

Understanding the economic imperatives that underpin technology evaluation, is foundational to effective sourcing. In the absence of economic context, technology, for Real Estate, drifts into silos, and eventually withers, draining costs, resources and good-will with it. In this session The PropTech Connection will discuss current economic imperatives impacting Real Estate, and will demonstrate how we unpack one of these economic imperatives, to begin aligning business-need to global technology-solutions.

Referrals within the VC ecosystem are pivotal and a great way to source the right startup. They function as conduits of trust, accelerating the screening process by vouching for the startup's quality and potential. Such endorsements, underpinned by established relationships, substantiate the viability of investments, affording VCs a curated access to prospects while mitigating informational asymmetry.

I would also recommend creating and cultivating your personal brand. VC is all about relationships. Building trust, managing and maintaining your reputation, having crystal clear communication are key to success. Personal branding is important not only for VC professionals but also for our overall career. Enhance your online and offline presence. Besides attending events, consider becoming a speaker, startup advisor, top voice on Linkedin; host events; show your expertise.

Seek out founders who have a history of success (whether in business, as athletes, in school, etc.). “Winners win” and exceptional founders will think creatively, persevere through challenges and outwork their competitors.

Some important aspects that aid in determination are 1. What you believe to be the real obtainable market (not what is mentioned in the deck) 2. Ability of the team to crack the market and determine other companies in the segment and trace their growth. 3. If it meets with your own thesis on sector/s of interest