Establishing a public presence through activities like blogging and thought leadership can attract founders and expand investment opportunities.
Engaging with scientists and researchers in specific fields can provide valuable insights into emerging technologies and connections with potential entrepreneurs.
Thematic investing allows VC firms to focus on specific sectors, build expertise, and generate deal flow within their chosen themes.
Deep dives
Using PR and building a public presence
One tactic for sourcing investments is to leverage PR and establish a public presence. This can be done through activities like blogging, participating in interviews, and writing thought leadership pieces. By increasing visibility and showcasing expertise, VC firms can attract founders and gain access to a larger pool of investment opportunities.
Becoming a technology sponge and hanging out with scientists
Being a technology sponge and actively engaging with scientists and researchers in specific fields can be an effective sourcing strategy. By immersing themselves in these communities, VC professionals can gain insights into emerging technologies and form connections with potential entrepreneurs who are at the bleeding edge of their fields.
Developing a thematic investment strategy
Thematic investing involves focusing on specific sectors or industries and building expertise and a track record in those areas. By becoming known as experts in a particular domain, VC firms can attract founders and generate deal flow within their chosen themes. This strategy allows for a more targeted approach to sourcing investment opportunities.
Leveraging specific talent networks
VC firms can tap into specific talent networks, such as alumni associations, engineering communities, or industry organizations, to source promising entrepreneurs and investment opportunities. By actively participating in these networks, VC professionals can build relationships with potential founders and gain access to startups in their early stages.
Establishing a reputation through late-stage investments
Making strategic late-stage investments in high-profile companies can help build a firm's reputation and attract quality deal flow. By joining the boards of successful companies, VC professionals can learn from the experiences of other investors and build relationships that can lead to early-stage investment opportunities.
Customizing sourcing tactics based on individual preferences and firm strategy
Overall, VC professionals need to tailor their sourcing tactics to fit their individual preferences and align with their firm's overall strategy. This might involve a combination of different tactics, such as public presence, networking in specific talent networks, or leveraging thematic investing approaches. Flexibility and adaptability are key to finding the right mix of sourcing tactics that work best for a VC professional and their firm.
Despite many advances in industry transparency over the past ~10 years, much about the actual "jobs of a VC" remains locked inside firm/institutional knowledge and venture's apprenticeship model. With this new series, we aim to change that. Our goal is to draw back the curtain on what the actual tasks are that VCs do day-to-day, how you can learn them, and ultimately what's required to succeed. We hope this series will be helpful both to anyone looking to break into the industry and to those who are already practicing and also for entrepreneurs and consumers of venture capital to understand more about the motivations and activities of those across the table!
In this episode we start with sourcing: what it is, why it's important, who does it and when, and -- most importantly -- the brass tacks of where to look and how to do it.
