Best Practices for Sourcing Venture Capital Deals


In a hypercompetitive funding landscape, venture capital firms need to maintain visibility on developments in their industries and track emerging trends. They spend their time where it matters most — sourcing new venture capital deals. When VCs are focusing on new deal sourcing, it can be challenging to manage relationships and keep track of data. One proven strategy being deployed by venture capital firms to help solve these challenges is to invest in deal sourcing technology built specifically for venture capital professionals. Venture capital deal sourcing technology can increase your firm’s competitive advantage by helping you manage your deal pipeline, execute on deals more effectively, and build more meaningful relationships.

In this guide, we outline best practices for sourcing venture capital deals and how VCs can use deal sourcing technology to help stay ahead of the competition and achieve success.

1 – Define your target market and open direct lines of communication

Sourcing new deals doesn’t happen overnight. There are many steps in the process and having a venture capital deal sourcing technology in place can help. Before any deals are made, VCs must define their target markets and create direct lines of communication into those markets. Below are some actions to consider when sourcing new venture capital deals.

Do Your Research

Following news and trends in the venture capital industry is one of the best ways to determine the kind of market you want to target. Research companies that are on the rise and determine the pitch you’d like to share with them. To win their business, outline what your capital and connections can do for them. Through DealCloud’s DataCortex, VCs can access valuable insight from data providers such as PitchBook, FactSet, Preqin, and more to properly research the industry or market you plan to invest into.

Focus on Building Your Network

When it comes to deal sourcing, relationship management is key. When you establish the market you want to target, it’s important to network with executives and business leaders in that market and in that industry. Using DealCloud’s venture capital deal management and sourcing technology, you can keep track of your network contacts and activity with those contacts all in one place, which can help make a larger impact on your overall sourcing strategy. Being well-connected in your target market facilitates more meaningful introductory conversations and provides you with the background knowledge you’ll need to truly execute in that industry.


Venture Capital Software Demo Preview of Communication Tool
Using the Sourcing Network dashboard, users can track deal activity, view deals by source type, organize network contacts, and more.


Determine Your Communication Strategy

The way in which you communicate with your target market can determine what kind of relationship you will have with them. This means choosing the tone and cadence of communication as well as the communications method. One effective way to communicate with your network contacts is through email. Using an email solution that is synced with your relationship management platform, such as DealCloud Dispatch, can help you reach as many contacts as you need in an easy and efficient way. Schedule your demo of DealCloud technology, including Dispatch, today.

Schedule your Dispatch demo


Tracking Engagement Using Dispatch Venture Capital Software
Using Dispatch, users can send emails to their contacts and track engagement metrics.


2 – Utilize knowledge intelligence and deal sourcing tools

From tracking your executive network to discovering funding history data for companies, DealCloud has been refined to help the most competitive venture capital firms source and execute on deals more effectively. The DealCloud platform is fully configurable, meaning it is easy to access and leverage any field or data set, regardless of fund size or investment preferences. DealCloud’s platform equips you with custom network coverage reports and dashboards, so your entire firm can feel the technology’s impact from day one.

When it comes to sourcing new deals, venture capitalists can track all prospecting and origination activity including type of meeting or communication, monitor target companies by stage, and more within the DealCloud platform. For a full view of our deal sourcing tool for venture capital firms, schedule a demo.


Venture Capital Prospecting Tool Demo Screenshot
Above shows a number of the capabilities of the Prospecting dashboard in DealCloud that can help track deal sourcing.


In addition to prospecting and sourcing networks, DealCloud’s network coverage dashboard allows users to view deals and introductions by sources and date. This supports every VC’s needs to quantify the value of their collective network and measure the effectiveness of their outreach efforts.

Tracking Sales Activity in DealCloud's Software Demo Screenshot
Users can track their activity across their network of contacts in DealCloud.


DealCloud offers a robust desktop/web application as well as a mobile app, making it easy for you to source new deals in the fast-moving venture capital landscape wherever no matter where you are.

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3 – Attend conferences and networking groups to grow your referral base

You know the world of venture capital is all about connections, but how do you capitalize on those relationships better than your competition? Here are some tips on how to turn your time spent networking into new deals and how DealCloud’s deal sourcing venture capital technology can help.

Attend industry conferences and events

Attending industry conferences and networking events is paramount since the contacts you make at these events could potentially lead to your next big deal. After attending an event, you will likely have a large stack of business cards from new contacts. DealCloud’s business card scanner functionality on the mobile app saves you time and hassle, directly scanning and importing contact information into our CRM. Once you’ve added your contacts into DealCloud, you may use the DealCloud Outlook Add In functionality to track all communication activity when setting up a meeting or call.

Join Venture Capital-focused groups on social media

It’s important for VCs to stay connected and on top of news and trends in the industry. By joining industry-specific groups on LinkedIn and Twitter, you will have insight into what topics are top of mind in the industry and who the main players are. You can also use these groups to network with colleagues which can help you determine what companies to target next.

Sourcing venture capital deals with DealCloud

From executive network pipeline tracking to deal and pipeline management, DealCloud’s enterprise-grade, cutting edge, single-source technology has been refined to help venture capital firms source and execute on deals more effectively.
To learn more about how DealCloud’s venture capital deal management and sourcing technology can help your firm accelerate its success, contact us today.

Schedule your Dispatch demo


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Olivia Simons

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