Sourcing and Selecting Opportunities

A venture firm's results depend on seeing the companies that will matter early enough to invest at a sensible price, picking the few that can become outliers, and persuading their founders to take its money. Investors themselves rank selection highest. In the survey of 885 institutional venture capitalists by Gompers, Gornall, Kaplan, and Strebulaev, 49% named deal selection the most important driver of value, against 27% for post-investment help and 23% for deal flow. How Do Venture Capitalists Make Decisions?, NBER