VC Sourcing 101
Earlier, we discussed how to source interesting startups to talk about for a VC interview. However, while the ability to raise capital from top VC firms is certainly a good filter to identify interesting startups, as a venture capitalist, it is imperative that you are able to identify and source new, up-and-coming companies. The best venture capitalists are often the first ones to identify and provide capital to the top startups.
How to find NEW and INTERESTING Startups
Leverage Your Network
- Take a moment to think. Seriously! Who do you know who is at a startup right now? Do they like what they are doing? Do they see the company succeeding? What did they give up at a previous role to come work at this company?
- Use the handy Linkedin or Facebook search bar. Where is your role model, #womencrushwednesday, or #mancrushmonday working?
- Scroll through your feed. Who just posted or updated their bio to be “We’re hiring”? Who just joined a startup that they are stoked about?
- What executives and senior employees are leaving tech companies to start their own business?
Tools
Social Media
(LinkedIn, FB, Instagram, Twitter, Reddit)
- Many VCs scrape information from social media platforms
- What companies have had high growth in # of employees? # followers? Etc
- Tech/VC twitter — surprisingly great resource, start with 20+ suggested accounts (top VCs, founders) and expand from there organically
- Follow #venturecapital, #startup
Industry conferences and events
- Attend startup events on Meetup and Eventbrite, Industry Expos, Webinars and Conferences
Angels
- Keep an eye out for prominent Angels and Angel Groups
- AngelList
Universities
- Colleges and MBA programs are hubs for entrepreneurship (Top 10)
Accelerators
Many VCs either have their own accelerators or partner with accelerators to further open up the pipeline
Top Accelerators:
YCombinator
- If you are looking for a mature company, check out their “Top Companies List” (2019)
- If you are looking for a smaller startup, reach out to companies in recent batches (running list).
500 Startups
Plug and Play
MassChallenge
Additional Resources
Check out our section on understanding the market, which includes industry-specific resources as well as our favorite newsletters, podcasts, investors on twitter, and more.
How to reach out to companies
The best startups often have multiple venture capital firms trying to get in on the next funding round. Thus, writing an incredible cold email and breaking into the company is one of the most undervalued skills in VC.
How to Write a Good Email
This section was written by Jamie Cuffe and Mihika Kapoor for Silicon Valley Tiger Trek. Their tips are very applicable to writing cold, thank you, and follow-up emails.
General tips:
- Try to keep your paragraphs no longer than 3–4 lines of text on the screen- will help to avoid the “wall of text” effect and make them more likely to read all of it
- Make sure the first sentence of each paragraph is the most important one. People tend to read the first sentence and then skip ahead
- When you copy and paste in email it actually formats strangely — to avoid this, highlight the pasted text, go to the very end of the formatting bar and click “Remove Formatting” (it looks like a T with a diagonal line through it)
- Triple check spelling, especially the person’s name
- Personal context is crucial — these people get too many emails and will not read boilerplate templates with [Insert Company Here] tag lines.
An outline we’ve found useful (no need to stick to it perfectly):
- First paragraph: throw in a “thank you for meeting with us” (always helps to be gracious) on TigerTrek and mention one specific point from your notebook that was memorable and meaningful for you — this will catch their attention
- Second paragraph: concise summary of what you’re following up about, make it interesting to them — stand out.
- Third paragraph (one line if possible)- make the ask, boldly, whatever it is.
- (Depending on how formal the interaction is- if more formal, include): “I know you’re extremely busy so thank you for your time and consideration”
Not all emails need to follow this structure by any means. If you’ve got a plan don’t let me cramp your style.
Thank you emails
Thank them using specific examples of what you learned, and be sincere and CONCISE! Reach out to the recruiters, too! Learn the principles, apply them in your own words, and only reach out to people you are actually interested in otherwise it’ll be very, very weird.
Once you’ve connected with someone you admire on TigerTrek what’s the secret to turning that one-time meeting into an ongoing relationship?
The “secret” is following up — in the right way.
A VIP wants to know that you listened to his advice and actually followed through.
Imagine you’re a VIP: If you meet with someone, and they write back saying, “Hey VIP, thanks for the time, and thanks especially for pointing out that [GENIUS POINT I MADE]. I took what you said and reached out to Beth Jones and Mike Smith and found out [AMAZING ACCOMPLISHMENT]. That helped me ________…”
THAT is worth more than any amount of money they could give you. And it’s the first step to building a relationship.
If you’re going to meet a VIP on TigerTrek, why go through all that trouble…and then drop the ball by not following up?
The Closing The Loop script helps you stay in touch with people you’ve met once and turn a one-time meeting into a long-term relationship. When you use this, you won’t come off as sleazy, slimy, or scammy — because you’re truly putting their needs ahead of your own.
Notice that a simple “thank you” message isn’t enough. Everyone sends that! It’s become the price of admission. How do you go beyond that to actually make the VIP want to help you?
Here’s how.
Enter the Closing The Loop Technique:
1. Thank You (same day)
Hi Steve,
Just wanted to thank you again for meeting with me earlier. I’m definitely going to get in touch with Susan like you recommended. I’ll keep you in the loop, and of course, please let me know if there’s anything I can do to repay the favor!
John
[ANALYSIS: Notice the simple thank you, but also a reference to a specific action item you’re going to follow up on (showing you were paying attention during the meeting/call). This email ends with a friendly offer to help and asks nothing of the VIP.]
2. Add Value (1–2 weeks later)
Hey Steve,
Saw this article in the Wall Street Journal and it reminded me of what you said about productivity tests! No response needed, just thought you might find it interesting.
John
[ANALYSIS: This email is where things start to get surprising. The VIP likely didn’t expect to hear back from you, since almost nobody follows up beyond one email. In this email, you’re sending a valuable piece of material — an article, blog post, photo, whatever — of something you KNOW he will find interesting.
How do you know what he’ll find interesting? Because during our meetings, you listened and took careful notes in your notebook!
Finally, pay close attention to the phrase used in the last sentence: “No response needed.” This is music to a busy person’s ears. Think about it: I get 600+ emails/day, and do you know what most of them want? They want something from me. When you can say “No response needed,” and send me something I find fascinating, you’re adding value to my life.]
3. Close the Loop (2–3 weeks later)
Hi Steve,
Wanted to give you an update: I did end up talking to Susan, and you were right — Acme is definitely a fit for me. I’m reaching out to a friend there to learn all I can about Acme before I apply. If there’s anyone else you think I should speak to, please let me know.
Thanks again! I’ll let you know how it goes.
John
[ANALYSIS: Here, you show the VIP that you actually took action on what he suggested. This will instantly differentiate you from 99% of people. Notice you name specific names, let him know if he was right (or even if you chose something different than his recommendation).
In the last 3 sentences, there are also 2 non-obvious things going on. Can you spot them?]
P.S. This is all free stuff on Ramit Sethi’s blog. Read, learn, apply, prosper!
How to reach out on LinkedIn
Keep it short + simple.
From Inhersight
Example 1
Hello X, my name is X. My background is in X and X. I’m exploring job possibilities and at this stage, am thinking that X could be a fit for me because I could do X exceptionally well. Can we meet for 15 minutes to discuss?
Example 2
Hi [employee name],
[Insert commonality or compliment here, such as, “It’s great to connect with someone else who’s written for TechCrunch,” or “I sent all of my coworkers your primer on SSL — best guide I’ve read!”
I’m interested in [company’s] open [job title] role, and since you [have been at company for X years, work on the Y team, are doing great work there], I’d love to get your thoughts. Would you be open to answering 3–5 quick questions? It would be so appreciated.
Other resources:
How to Write LinkedIn Messages That Actually Get Read
3. Good tools for reaching out to companies
To find contact information:
- RocketReach
- Hunter.io
Make Emailing easier with these chrome/gmail extensions:
- MixMax
- Boomerang
Additional Resources:
This section was co-authored by Ayushi Sinha, Katherine Xiao, Mihika Kapoor, and James Cuffe
