Where I’m Finding the Best Startups Now – Tremendous
Lots of people want to become angel investors. But where do you find great deals? Here’s where I’m sourcing deals now…
I looked at all 35 names in my portfolio thus far. For each one, I noted where I first heard about the company.
Where My Deals Are Coming From
Here are the results…
Jason’s Syndicate: 23
Demo Day: 3
Fellow Investor Referral: 2
Used Product: 1
Tom Williams Syndicate: 1
Mana Ventures Syndicate: 1
Founder Referral: 1
Mercury Raise: 1
OpenVC: 1
Twitter: 1
One source stands out far beyond the others: Jason Calacanis’ syndicate. It’s an amazing source of deal flow.
The fella who found Uber and Robinhood will probably find the next big company too. When he does, I want to be there.
How My Dealflow Is Changing Today
When I first started as an angel, I didn’t know anyone in startupland. So I only did syndicate deals.
Now I’ve been investing for a little over 4 years. I have my own dealflow, and I also cold message interesting companies regularly.
Here’s where I’ve sourced my 6 most recent deals…
Jason’s Syndicate: 3
Founder Referral: 1
Mercury Raise: 1
Twitter: 1
I’ve gone from all syndicate deals to 50% of my deals being direct. I expect that percentage will rise to at least 75% over time as my network grows.
That said, I love doing syndicate deals. Sometimes, the lead will see a company I don’t.
I like having that flexibility to still invest. And if it’s an Uber, giving up 20% of the gains doesn’t bother me at all.
Why I Cold Message Founders
In two of these 6 cases (the founder referral and the company I found on Twitter), I cold messaged the founders. That’s something I do more and more.
In fact, most of my meetings these days are companies I contacted. That way, I know I’ll be interested in what they’re doing!
I like to tell the founder exactly why I found their company compelling. I definitely do not send the same message to everyone.
If my message is carefully tailored to the specific company, I’m more likely to hear back. I also message the same company repeatedly if I don’t hear.
I’m a small fry. I can’t expect the best deals to come to me.
But I’m in good company. Sequoia cold messages companies regularly.
In fact, that’s how Jim Goetz won the WhatsApp investment. If you out hustle the competition, you win.
Wrap-Up
Of the countless companies founded every year, only a few will matter. The one thing that matters in venture capital is to own a piece of those companies.
So I cast a wide net and meet lots of companies. Of the startups I see, I put a check into 1 in every 250 deals on average.
I’m always looking for new sources of great deals. So if you have one you love, let me know!
There will be no blog tomorrow for the holiday. Have a happy July 4th and God Bless America! 🇺🇸
More on tech:
My Biggest Losses as an Angel Investor
Do Non-Founders Make Better Investors?
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