Do top venture firms need a systematic sourcing process, or does brand and network alone generate sufficient deal flow?

Terrence Rohan · Feb 5, 2024

Seed coverage has collapsed: early in their careers an investor could see 50-75% of seed deals, but geographic expansion, fund proliferation and fragmentation have made that impossible

The ecosystem was tiny and deals passed through everyone's inbox; year after year geographies, funds and relationships expanded

30:02 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

David Tisch · Feb 5, 2024

Tech shifted from a vertical to a horizontal, massively expanding the types of businesses early-stage VCs fund, so the scaled deal coverage possible in 2010-2015 is now only a fraction of that

The universe of fundable business types expanded enormously

30:29 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Terrence Rohan · Feb 5, 2024

Weak deal coverage is a market shift rather than an individual failing, and seed rounds are now so efficient they close in days over a single Zoom

The market is much larger and highly fragmented, and multi-stage funds close rounds immediately versus the old process of multiple meetings over weeks

Scope: acknowledges some investors do have better coverage

30:52 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Pat Grady · Jul 8, 2024

Sequoia is an 8-9 out of 10 at sourcing but not perfect, especially at the earliest stages

Complete coverage is impossible at the earliest stages because founders can come out of anywhere, but for the most part Sequoia sees good companies early enough to form a real point of view

Scope: self-assessment; weakest at the very earliest stages

24:33 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady

Shardul Shah · Sep 16, 2024

Winning deals is the hardest venture competency to develop, and sourcing coverage is not a goal worth optimizing for

Index are rifle shooters, not aiming to see every opportunity on the planet — if they were, they'd be built with an army of scouts or a huge data science team

Scope: ideally you'd be great at all of sourcing, selecting, winning and supporting

35:02 20VC: Index's Shardul Shah on Why Market Size is a Trap | Biggest Lessons on Pricing from Leading Rounds in Wiz & Datadog | Why Benchmarks & Averages in VC are BS | How Index Makes Decisions and Why Growth & Early are the Same Investing Style

Harry Stebbings · Oct 21, 2024

Deal access is not an edge in venture — everyone sees the same deals, so the only thing that matters is being the aspirational capital a founder picks from 12 term sheets

Sourcing a deal is worthless if the founder chooses someone else

41:44 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Mamoon Hamid · Oct 21, 2024

Winning deals comes down to positioning so founders choose you — reputation, the firm's body of work, what you offer before and after involvement, and what past founders say about you

42:04 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Pat Grady · Jul 8, 2024 · hedged

Sourcing is now his own weakest link in the investing lifecycle, despite having been his greatest strength a decade or more ago

Sourcing was the only way he could distinguish himself at Sequoia early on — finding companies worthy of Doug Leone's attention

50:04 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady

Pat Grady · Jul 8, 2024 · hedged

Sourcing may be a young person's business, but picking is not — picking requires both youthful work ethic and accumulated experience, which is why mid-career investors are often the best

Experience and knowledge compound so the picking algorithm improves, but venture is a details business: separating great from truly exceptional requires being in the details, because 10 or 15 companies that look identical from a distance look very different up close

Scope: it depends where in the value chain you look

50:24 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady

Harry Stebbings · Aug 4, 2025 · hedged

Venture, at least on the sourcing side, is a young person's game.

Sourcing is about pounding the pavement, being there and showing up at 7am, which takes youthful energy.

Scope: "in some respects"; specific to the sourcing pillar

24:57 20VC: Inside Carnegie Mellon's $4BN Endowment | Why 90% of LPs Shouldn't Invest in VC | The $140BN Problem with Multi-Stage Funds | The Hidden Math Behind DPI, TVPI, and Illiquidity with Miles Dieffenbach

Byron Deeter · Aug 25, 2025

The essential and most overlooked part of sourcing is the insight to see what others don't, not just aggressive creative outbound

Contrarian deal insight is what actually produces unique deals

69:49 Contrarian insight not aggressive outbound is the essential sourcing skill

David Cahn · Aug 5, 2024

Seemingly ridiculous creative outreach tactics — commissioning Cameo videos from actors a founder likes, or a daily Loom teardown of a product — are shockingly effective at getting a founder's attention

Early on nobody gives a young investor the time of day, and getting in front of people is the hard part; once you're in front of them you can make your case

63:05 Creative personalized stunts cut through noise for young investors without brand

Michael Eisenberg · Jun 19, 2024

After thirty years in the business proactive sourcing is unnecessary — referrals supply more than enough interesting deals for the two or three investments a year he needs

Thirty years of relationships generate sufficient inbound

52:12 Long tenured investors with few annual checks need no active sourcing

Harry Stebbings · Oct 21, 2022

Y Combinator and Sequoia have productized continuous discovery of the best companies better than anyone, and Benchmark is unparalleled at winning a deal once they collectively want it

Sequoia's scout programs and ARC institutionalize sourcing; Benchmark's partnership circles a founder in a uniquely convincing way

13:42 Yc and sequoia productized continuous sourcing benchmark wins once collectively wanted

Jason Lemkin · Nov 30, 2022

Outbound sourcing and warm referrals do not work for him; every investment he has made came from high-velocity inbound emails from SaaStr fans

Every deal he tried to go out and get failed, and every warm referral failed to work out, while the strong inbound emails break through

3:51 High velocity content driven inbound outperforms outbound and warm referrals for me

Jason Lemkin · Nov 30, 2022

The social platforms that generate VC deal flow decay — Quora is now dead for B2B and blogs are dead, even though SaaStr's blog traffic remains huge

In Quora's early days Gary Tan, Keith Rabois, David Sacks and Stuart Butterfield were commenting there; now it's dog pictures, and he's alone getting half a million views a month

49:55 Social platforms that generate vc deal flow decay over time quora and blogs are now largely dead

Harry Stebbings · Nov 30, 2022

It is a VC's responsibility to move with new platforms as they emerge, just as it is a founder's job to scale into enterprise and new products

Platforms change, so the obligation to adapt sits with the investor

51:07 Investors must adapt to new sourcing platforms just as founders must adapt to new stages

Trae Stephens · Apr 3, 2024

Being extremely easy to work with — hands-off, no board seats, operationally helpful only when asked — is the easier half of winning deal flow; maintaining visibility into every relevant company is the hard part

Founders Fund pioneered founder-friendly terms and has that in spades, but access requires the whole investment team's focus

28:20 Founder friendly terms are easy comprehensive market visibility is the hard differentiator

Tom Hulme · May 8, 2024

Being an indiscriminate enthusiast is a sourcing edge — it lets you engage any founder on any idea and cast a wide net

He can sit with a founder with almost any idea and genuinely engage and care, which widens the opportunity funnel, compounded by a trusted referral network built over time

29:22 Being an indiscriminate enthusiast widens the sourcing funnel

Adam Besvinick · May 29, 2023

As a bandwidth-constrained solo GP who cannot be a generalist or see every deal, thematic investing is the fundamental driver of all sourcing

A defined theme makes him top of mind for co-investors building syndicates, pulls in cold inbound from founders looking for relevant investors, and gives him instant credibility on cold outbound because he can point to a portfolio of directly relevant companies

27:03 Thematic focus drives sourcing through co investor top of mind status and inbound credibility

David Tisch · Feb 5, 2024

Cold inbound is worth taking because quality deals do sit in the inbox and get missed more often than you would assume

They have repeatedly seen a deal arrive later via a warm source and realised it had been sitting in their inbox all along

81:17 Cold inbound deals are worth triaging since quality deals get missed

Terrence Rohan · Feb 5, 2024

A great cold email is itself a form of founder hustle, as distinct from a copy-and-paste blast

A human, attention-grabbing, personable email demonstrates the same quality as hustling a warm intro

81:53 A well crafted cold email demonstrates founder hustle like a warm intro

Miles Dieffenbach · Aug 4, 2025

Premier firms have no systematic sourcing strategy — their edge is brand and partner networks generating first calls — whereas esoteric strategies targeting off-radar companies can build automated CRMs as a real sourcing system.

The partners and brands are so strong and so networked in the S-tier founder community that they get the first call; only strategies hunting places like bootstrapped Australian or Pittsburgh companies need and benefit from systematic tooling.

22:32 Premier firms rely on brand networks while niche strategies need systematic crm sourcing

Harry Stebbings · Aug 4, 2025

Top-tier brand firms become a de facto meeting in every fundraise, so the flagship firms see essentially every company at some point in its journey.

Founders check in with Index, Accel, Sequoia and similar before signing a term sheet, making those firms flag posts in the process.

23:09 Flagship brand firms see every company through the fundraising process itself

Miles Dieffenbach · Aug 4, 2025 · hedged

Sourcing is mostly luck and hustle rather than an edge, with only a few exceptions like Ali Partovi, because the market for founder access is now extremely crowded.

There are so many alternatives — South Park Commons, Ali Partovi's network, YC, Techstars, a thousand seed funds — that sourcing comes down to taking as many meetings as possible and getting lucky on emails and referrals.

24:19 Sourcing is mostly luck and hustle not a durable edge

Victor Lazarte · Apr 14, 2025

Joining a top-tier firm brings plenty of inbound, but not the deals you actually want to do — those mostly have to be sourced outbound

He isn't from Silicon Valley and has only been an investor for about eighteen months after thirteen years as a founder, so few people think of him as an investor; the companies he wants come from asking high-quality people what has impressed them and doing sector homework

25:21 Brand inbound is not the deals you want outbound sourcing still required

Victor Lazarte · Apr 14, 2025

Peter Fenton's ability to get people to open up is a genuine investing superpower and a sourcing advantage, because people leave dinners feeling it was special and tell others

Victor has seen people he'd known for years reveal far more in a single dinner with Peter, and the reputation makes hard-to-reach people accept invitations

60:33 Personal charisma and trust building is a durable sourcing advantage