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How Do Venture Capitalists Make Decisions?

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Re: How Do Venture Capitalists Make Decisions?

#31
The first table, which shows where deals are sourced from, was most interesting. I was surprised that VCs reported that 22% of leads were proactively sourced.

Beyond that, I don't think the trust VCs to self report. In particular all VCs say "team" is really important. But in my experience they don't really probe the team very much, or get to know them and their background well.

Possibly what they mean is "has previously been CEO of successful startup" or something similar.

Overall, I think VCs build up a qualatitive feeling of how comfortable they are with a play. And critically, how well it can be justified as being a reasonable decision if things don't go well.

Re: How Do Venture Capitalists Make Decisions?

#33

Earlier quoted context omitted.

if you have counterexamples then you are right and I am wrong. I shot you an email asking for details of your counterexamples and will write in a reply if in my opinion they falsify my claim. (Or you can include them here if they're public.) I'm open to the idea that I was wrong.

As of 8 hours later I did not receive your mail. If the email in your profile is not correct you can mail me at mine. I am scientific and made a strong claim above: if you have a plurality of counterexamples I would like to update my comment stating I was wrong. So far I have just a statement from you that you know of counterexamples. I do not. Thank you.

Update: I received an example via email that included approximately 40 investors passing and not being interested, until the seed round began to be put together at which point it snowballed. I would say this strengthens my conviction that the levers listed in the article are not how VC's make their decisions: because those listed levers did not change to cause the change in investor decision.
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