VC Fundraising Strategy
How VCs Really Source Deals — And Why Warm Intros Still Win
Cold emails are common. Funded deals? Much less so. Most great startups don’t get “discovered” — they’re introduced. If you’re relying on pitch competitions to get noticed, it’s time to rethink your strategy.
Let’s bust a myth:
Venture capital is not a meritocracy.
Yes, great ideas matter. Strong execution matters. But when it comes to how VCs actually find the deals they fund — it’s far more relationship-driven than most founders realize.
In fact, according to a landmark Stanford study led by Ilya Strebulaev, two-thirds of VC investments come from pre-existing relationships or trusted referrals. Not cold outreach. Not demo days. Not social media.
Here’s how top-tier venture firms actually source their deals — and how founders can strategically position themselves to be seen before the pitch.
1. The Best Deals Are Pre-Wired
Great startups rarely “emerge” out of nowhere. Most are whispered about long before the deck ever hits a VC inbox.
VCs source deals through:
• Other VCs they trust (especially those earlier in the funding stack)
• Operators and executives who’ve scaled successful ventures
• Angels and scouts with a sharp eye for talent
• Founders already in their portfolio (a surprisingly common channel)
This is what’s called relationship-based deal flow — and it accounts for the majority of high-quality opportunities in early-stage investing.
If your startup isn’t part of that whisper network yet, the first job isn’t the pitch. It’s the positioning.
2. The Science of Warm Intros
According to the Harvard Business Review, warm intros increase your odds of a positive response from investors by over 50%.
But it’s not just about who introduces you — it’s about why they’re willing to.
Founders who get introduced successfully tend to:
• Build early relationships with value (before they need capital)
• Share meaningful updates that signal momentum
• Show up in relevant communities and investor forums (online or offline)
• Treat every operator, scout, or angel like a potential node in the network — not just the VCs
VCs aren’t just sourcing deals — they’re scanning for social proof.
3. What Founders Can Do Now
If you’re preparing to fundraise, ask yourself:
• Who’s already talking about me?
• Who in my network could credibly introduce me to VCs?
• Have I stayed visible and valuable to the right people — consistently?
• Do I treat intros as one-off asks, or part of a long-game reputation?
And most importantly:
Are you building relationship equity before you ask for financial capital?
4. What VCs Should Ask Themselves
Founders aren’t the only ones who should break their sourcing echo chambers.
VCs should ask:
• Am I relying too heavily on familiar circles?
• Am I building sourcing relationships outside of Stanford and YC?
• Do I actively cultivate diverse operator networks for referrals?
The next generational company may not come from the usual pipeline — but someone in your extended network likely knows them.
Final Thought:
Startups don’t just get discovered — they get positioned.
They build trust long before the first meeting.
And by the time the pitch happens? The decision is already halfway made.
Whether you’re a founder trying to raise or a VC trying to source better, the same principle holds:
The most valuable currency in venture is still trust.
If you’re preparing to raise and want to position your startup for pre-wired introductions, we can help.
Book a Startup Capital Strategy Session or explore our Founder Pitch Audit to strengthen your network and narrative.