Why I started a deal flow distribution list, and why I’m doubling down
Story time!
In the fall of 2023, I was at a daunting transition in my career. Up until that point, I had always been a specialist. The vast majority of my 7 years in higher education — first as an undergrad at Princeton and later as a dual degree grad student at Johns Hopkins — was spent on life sciences and healthcare. As an equity research analyst, I focused squarely on industrial machinery, which required me to build deep domain knowledge in the areas of agriculture, construction, mining, and manufacturing. Later, working as a managing analyst at CB Insights, my research covered all things digital health. And in 2022, when I jumped over to VC, I was doubling down on my healthcare expertise: my entire investment mandate at the time was specific to health tech. But we’re in the business of change. And things change! And towards the end of 2023, I suddenly was tasked with expanding my coverage beyond health tech to all vertical software (i.e., software purpose-built for any specific industry). Essentially, I was becoming a generalist.
Having done it time and time again before, I knew I was skilled at spinning up a knowledge base and a network in any new industry or specialty domain I set my mind on. But this was different. Taking aside the small subgroup of vertical software pioneers (e.g., the founders of companies like ServiceTitan, Procore, Toast, Shopify, etc.) and their VC backers as outliers, there really wasn’t this easily identifiable, latent network of “vertical software” people for me to connect with. They spanned every industry! And most VCs who look at vertical software are quite generalist in nature. Quite rarely do they identify as “vertical software” specialists. More often than not, they’re also looking at industry-agnostic tech as well. So they were hard to identify as an outsider looking in (note: this has become a lot easier now that vertical AI has become such a trending topic in the VC community. Everyone and their mother is writing content about it.).
So basically, I knew I had to massively expand my network to the broader VC community — to the point where I had a reliably representative sampling of the entire VC landscape, across all industry specialists and all generalists — and I had to do it fast. But I knew just cramming my calendar with happy hours every evening wasn’t going to do it. First off, I can’t spend all my time socializing with other VCs. I need far more time with founders, operators, industry experts, etc. Secondly, and more importantly, I knew simply getting in front of people and getting them to like me wasn’t ever going to be enough.
What I needed were meaningful, valuable connections. And the way to do that was to provide value, early and often, to as many VCs as I could.
So I decided to complement all the basic network-building tactics with one of my own creation. Starting January 1, 2024, I started to keep a detailed list of every investor I met: what their investment theses were, what types of businesses they invest in (and don’t invest in), what stages they were open to, their typical check sizes and ownership targets, any geographic constraints they have, etc. At the same time, I would keep a running list each week of every active fundraise that crossed my desk (barring conflicts of interest, of course). At the end of the week — every week — I would cross-reference the two lists and send a curated deal flow email to any VCs I knew who were relevant to deals on that list. This is an important point: this is not a generic blast; it’s highly curated and I spend a lot of time thinking about which investors are most relevant for every company on my list. Only those who are relevant receive an email that week. And lastly, of course, I offered to make introductions between interested VCs and founders where possible.
52 weeks later, I can honestly say I’ve gotten so much more out of this effort than I anticipated.
First and foremost, it accomplished the goal: my network has grown tremendously, and the relationships have grown deeper with time. I can confidently say I’ve managed to develop far more meaningful connections with other VCs in my “deal flow email” era than before it. And I firmly believe the reason is because I made a commitment to provide value to them — as small as it may be — each week of the entire year, instead of just waiting for coffee meetings, or happy hours, or running into each other at a conference. This is also distinct from ad hoc deal flow shared between VCs over text. Typically, in those interactions only the few most relevant names are getting exchanged. With my deal flow email, VCs in my network get to see what’s relevant to them while also seeing what else is happening beyond their scope. This allows them to have a point of view on what is happening in the market upstream and downstream of them and flag to their colleagues or others in their network deals that might be relevant to them (in turn, allowing them to benefit in this highly “give-to-get” culture). And speaking of “give-to-get,” there’s no doubt about it: my personal deal flow has improved tremendously as a natural consequence of this work (importantly, without me ever asking for anything in return).
The second-order and unanticipated benefit of this work was the impact I could have on founders. As I started to connect them with interested VCs who replied to my emails, I immediately realized just how appreciative they were of the help (more on this below). It became so apparent that now I outright offer a “spot on my deal flow email list” to founders in my network. Also, now when I get inbounds from founders who fall outside of my mandate, I can genuinely offer them help (by putting them in front of others who might be more relevant) instead of having to turn them down right off the bat (or ignore them, as many VCs unfortunately do).
VCs — who have the privilege of hearing pitches all day, every day — don’t naturally appreciate just how hard fundraising is for founders, especially for first-time founders who lack a VC network or a natural entry point into one. Through the work I’m doing with The Green Room, I hear about founders’ fundraising trials and tribulations over and over again. And one of the most common things I hear is just how hard it is to know where to start: not only identifying the right funds, but also the right people within each fund. I’m generalizing, but for the most part, VCs do a pretty poor job of publicly disclosing their investment parameters (e.g., stage, check size, ownership targets, types of businesses they will/won’t invest in, what types of founders they will/won’t back, etc.). And the truth is, it’s not always so black and white, so it’s not like we should expect this to change. At the same time, funds are highly heterogeneous in how they operate (e.g., how they structure their teams, how they think/evaluate deals, how they make investment decisions, etc.). So, without an existing relationship, it can be hard for founders to know where to start. What often ends up happening is they take a “spaghetti at the wall” approach, trying to talk to as many different funds as they can. But unfortunately they’re subject to an imperfect feedback loop: without VCs responding to explain why they’re not a fit or offering others who could be a better fit, founders have limited information with which to course correct. And a ton of time, enthusiasm, and confidence is lost in the process, which in turn makes it harder to successfully close a round. One could also argue that fundraising has never been more challenging than it is in today’s age. Sure, there’s a surplus of capital in the market. But with accelerating advancements in AI, it’s also never been easier to start a company, meaning competition has grown increasingly fierce in almost every [existing] category imaginable. Speed (i.e., running an efficient process, finding the right investors to partner with) is absolutely essential.
And last but not least, it’s a great forcing function to keep myself organized and hold myself accountable. By reviewing what crossed my desk every week, I can regularly and honestly assess how well I’m doing (at seeing what I want to see) and identify gaps where I need to improve. The same is true of going through my custom-built VC CRM each week. Every week, I have a chance to ask myself if I’m doing a good enough job staying in touch with the people I want/need to build deeper relationships with.
So when people ask me, “Wow, that sounds like a ton of work. Why do you still do it?” I have three simple answers: (1) I fundamentally believe in paying it forward, (2) I want to help founders, and (3) I’m constantly trying to improve.
VCs: Want to get on the list?
I’d love to have you! But first, some ground rules:
This is limited to accredited, institutional investors only.
I need to get to know you first. The whole reason I do this is to build more meaningful (not transactional) relationships with folks in the industry. Here are a few ways you can find time with me: book a virtual meeting here, an in-person meeting in SF here, or an in-person meeting in Palo Alto here.
This is not meant to be a generic blast to the masses. Over time, I weed out recipients who don’t make an effort in return. What I care most about is quality, not quantity. So my intention isn’t to continue to grow this list, but to limit it to just the folks who demonstrate an interest in building a relationship and regularly engage in meaningful exchange. The actual people on that list could (and likely will) fluctuate over time.
If that sounds good to you, please fill out this form when you have a moment (it shouldn’t take more than a minute).
Looking forward to getting to know you!
Founders: Want to be featured?
Send me an email directly using this link: mmoore@omersventures.com
