Charlie O’Donnell joins Nick on The Full Ratchet to discuss dealflow, including:
- What does the term “dealflow” mean?
- How do you find great startups? Where are your main sources for dealflow and what is the percentage from each?
- Where do you tend to find the most startups in which you eventually make an investment?
- If we think of dealflow like a sales funnel… what are the major steps in your process to arrive at a yes/no?
- How do you accelerate this evaluation process in order to optimize your time and spend it on the right startups?
- When it comes to focus… do you believe startup investors should restrict the dealflow that they evaluate based on their domain expertise, vertical/market, geography, etc.?
- From a strategic standpoint, why is dealflow volume so important?
- In general, do you subscribe to the philosophy that an investor must see a certain number of companies for every one that they invest in?
- Brooklyn Bridge Ventures
- BLOG: This is Going to Be BIG!
- Follow Charlie on Twitter
- Dealflow Sources & Time-to-close Blog article: How early should you connect to a VC? Here’s some data.
It turns out, it took an average of 821 days from first connect, or about 26 months, and 162 days from pitch, or about 5 months. His initial estimates were pretty close to the actuals.
- the process of gathering other investors for a round.
- meeting the entrepreneur before they’ve really decided what they want to raise, or before they have a deck
Upon tracing the specific sources of dealflow, his results were interesting.
- Events accounted for 33.3%
- Non-VC intros accounted for 33.3%
- Inbound connections were 14.3%
- Outbound were 9.5%
- and Intros from other VCs were just 9.5%