Fund Structure
Deal Flow
The pipeline of investment opportunities a VC firm sees — more and better-quality deal flow is a key competitive advantage for top firms.
Deal flow is the stream of potential investment opportunities that a VC firm evaluates. High-quality deal flow is one of the most important competitive advantages in venture — top firms see the best companies first because the best founders want to work with them. Sources of deal flow: portfolio company referrals (the most valuable), founder networks, other investors, accelerators, inbound from founders, events, press coverage, and proactive sourcing. Firms track deal flow funnel metrics: deals seen → meetings → term sheets → investments. Most VC firms invest in fewer than 1% of deals they see. Generating proprietary deal flow (exclusive opportunities not widely shopped) is a key differentiator between top and median performing VC funds.