One of the posts I’ve most enjoyed writing over the years is my annual “Where Do Deals Come From?” post. My goals remain true from Day One: 1) to help founders better understand how venture investors operate and source deals, and 2) to optimize my own time to increase ROI
- Many of our investments this past year have yet to be announced, so I can’t share the usual detail
- To provide a deeper look inside our operation and deal funnel, not just the bottom-of-funnel deals that get done
Onto the numbers (for 2019):
Announced (4/10 Deals):
Core – Outbound
I remember stumbling upon this Techcrunch article (in 2018) about Core’s cofounder/CEO Sarah McDevitt and immediately being intrigued. I had tried to get into meditation a couple of times, and felt something missing in my experience. I cold-emailed Sarah and started building a relationship, and my own conviction, culminating in a seed investment this past May. They went live in the market, and the product is amazing - Check it out!
Yay Lunch – Investor Referral
A heartfelt thank you to Soraya Dorabi of Trailmix.VC for introducing us to Christina at Yay Lunch. When we first met in 2018, I was a big fan of Christina, but had some doubts around the initial business model. We stayed in touch (through a pivot and some team changes), and I watched from the sidelines as she executed like a boss. We wrote a preseed check in February, then co-led the Seed round in December after the company exceeded all milestones.
Prevu – Cold Inbound
Who says you need a warm referral? Our doors, inboxes, and minds are always open, and Thomas and Chase blasted right through with a big vision (to disrupt the homebuying experience) and outsized traction, giving us the conviction to lead their seed round.
Pair – Personal Network Referral
Ryan was introduced to young founders Nathan Kondamuri and Sophia Edelstein through a personal friend who was a customer. We were excited to partner with them, alongside PreCursor and Bolt, in their innovative children’s eyeglass company. Our initial investment here (2018) was part of our pre-seed program, in which we invest $100k very early with the purpose of tracking and relationship-building. We then upgraded to make this a core position in 2019.
Yet To Be Announced (6/10 Deals):
-Two were repeat founders coming off successful exits in our first fund
-Two came from personal networks
-Two came from investor referrals
How do we get to the 10 deals? At the bottom of our funnel in 2019, we lost 1 deal that we offered a term sheet to, giving us a 91% win rate. Below is a glimpse into some stats around our top-of-funnel and process.