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Industry study 12 of 23 · Venture Capital Research Companion

12: Sourcing, Selection and the Investment Process

~6,000 words · 2 technical exhibits

Purpose. This section explains how venture firms find companies, decide which to back, and turn a first meeting into a signed term sheet. It covers deal flow and the funnel, selection frameworks, the partner meeting, investment committee (IC) memos, and how decision rules differ between firms. It is written for associates and principals building a pipeline, partners running a decision process, founders who want to understand how a firm reaches "yes", and LPs judging whether a GP's process is sound.

What the study covers

  1. 1Overview: getting access, choosing well, then winning
  2. 2Sourcing
  3. 3The funnel
  4. 4Selection: what VCs look for
  5. 5The process from first meeting to term sheet
  6. 6Key numbers
  7. 7Landmark decisions
  8. 8Pitfalls
  9. 9How an expert thinks about it

Technical exhibits

Worked examples, checklists and case studies included with this study.

Ic Memo Template

A section-by-section IC memo template with guidance, plus a filled-in illustrative Series A memo with Python-computed ownership, scenario and fund-returner math

Partner Meeting and Pipeline Playbook

Pipeline capacity math for a fund, CRM stage definitions, how to run and present at a partner meeting, decision protocols, and the post-mortem loop