How to increase venture capital deal flow

Venture capital firms evaluate thousands of investment opportunities per year. 

But with the average firm investing in fewer than 1% of the opportunities they see, having a steady deal flow is critical to fund success. And with only so many hours in a day, it’s critical to stack your pipeline with only the highest-quality, most likely-to-close deals. 

While there may not be a one-size-fits-all solution to increasing deal flow, one important strategy for boosting deal-sourcing efforts is making the most of referrals. 

For most VCs, around 60% of closed deals stem from leads found in your network—former colleagues, work acquaintances, or other trusted sources. With a network-driven approach, the ratio can be even higher—with Sergio Monsalve, Founding Partner at Roble Ventures sharing that 88% of the firm’s deals stem from network referrals and tip-offs. Maximizing referrals should be a cornerstone of your deal flow strategy. 

In this article, you’ll learn best practices for building high-quality deal flow, establishing proprietary deal flow, and using new technologies to get (and stay) ahead of the competition.

What is deal flow?

Deal flow is a term used by venture capitalists, angel investors, investment bankers, and private equity firms to describe the quality and quantity of investment opportunities available to them.

Building consistent deal flow helps firms choose the best possible investment opportunities. This is because deal sourcing is a combination of intent and volume—selecting potential investments depends on having a large pool to select from.

VC firms primarily deal with startups and early-stage ventures, which means there’s limited performance data and historical insights to use when making investment decisions. Successful VCs need to fill their deal flow with high-quality and trusted opportunities. In the relationship-driven economy of private capital, your firm’s network can often influence your ability to maximize deal flow. 

7 tips to increase venture capital deal flow and deal sourcing

Many prominent VC firms can rely heavily on inbound deal flow. But outbound deal sourcing is often still a core function for deal teams to identify more high-quality opportunities, faster with 50% of investors saying that deal sourcing will be a top priority for 2025.

Here’s how your VC firm can improve its deal flow process by leaning into the power of referrals through an extended network. 

1. Source referrals from other investors in your network

It usually makes sense for VCs to prioritize referrals over other inbound requests, especially for riskier pre-seed, seed, and early-stage startups. Getting a stamp of approval from a trusted member of your network increases the likelihood that a potential deal is worth spending time on.

‍Sourcing new deals from your network is essential for increasing deal flow, and the value of these referrals often depends on the strength of the relationships between you and your connections. Stronger connections are more likely to understand your investment thesis, investment strategies, and your key objectives.

Because of this, their recommendations can be more tailored to your team. Getting these qualitative insights can be extremely important for early-stage investments when data is limited or not yet available. 

Sakib Dadi, Vice President at Bessemer Venture Partners, explains the importance of this human-to-human connection: “Oftentimes the most impactful relationships, the ones that help me the most with deal flow, come from talking to the person and getting to know them well.” 

By adopting a long-term perspective, you can build strong relationships that yield high-quality referrals and investment opportunities. Alexander Ross, General Partner at Illuminate Financial, describes how cultivating meaningful relationships is crucial for sourcing high-quality deals effectively: “For us, it’s definitely about depth. If I think about what success looks like in terms of our relationships with large strategics, it’s 10-15 very senior change agents within an organization who actually care about innovation and adopting early-stage solutions—versus necessarily quantum of new contacts.”

2. Talk to your portfolio companies about other founders

Portfolio companies are an excellent source of recommendations about other rising startups in their own network. You may often be the expert advisor for your portfolio companies, but they have access to inside information that can be invaluable to your team. 

They also know what you’re looking for. Your successful portfolio companies understand what you value in them, and they can share insight into potential investment opportunities or startups that they see as similar to themselves. They’ve likely chosen you as a business partner because they need your specific expertise to support their business. 

That dynamic becomes mutually beneficial when you can lean on your founders’ expertise in their industry to reach your deal goals. They’re subject matter experts too, after all.

Mark Bivens, Venture Partner at Truffle Venture Capital, speaks about his own experience, “If a member of one of my portfolio companies recommends I meet someone, I will most likely accept a meeting without hesitation. My portfolio company knows its market space better than I do, so if they find a fellow entrepreneur’s startup proposition compelling, this is tremendously valuable insight for me which creates some of the most relevant deal flow.”

This is especially helpful when you’re doing outbound work. Your existing portfolio companies can give you a unique perspective on historically under-invested areas and markets you’re unfamiliar with.

3. Ask your service providers for their expertise

Service providers (lawyers, banks, brokers, accountants, more traditional salespeople, etc.) are an often overlooked source of referrals. They’re valuable because, as non-investment professionals in your firm’s network, they’re also likely familiar with the industries you’re investing in. 

With their parallel knowledge and expertise, service providers have access to a broad sample size of trends and connections that can be useful for both deal sourcing and due diligence. Keeping these relationships warm means you can quickly tap into them when needed.

One way to automate this is to set up reminders to check in with your service providers on their book of business. By proactively staying on their radar, you can increase the chance that they’ll reach out if they start working with a new client in your wheelhouse.

4. Network your way to high-quality deal flow

While you should always draw on your team members’ existing professional network, expanding your network is just as valuable. Networking events, startup pitch nights, industry events, and accelerator demo days provide direct access to some of the best up-and-coming companies. 

Taking the stage yourself can also help you stand out to prospects and startups in a way that provides value to them. Collaborate with event organizers who can help you get speaking gigs—particularly at events in verticals that line up with your investment thesis. Some events will let you host “office hours” to connect and offer advice to founders, startups, private companies, and early-stage ventures.

Once you’ve built these new relationships, it’s crucial for your VC firm to manage them effectively. Adam Shuaib, Partner at Episode 1 Ventures, highlights how tools like Affinity can help streamline this process: “Affinity has been a big part of helping us manage our network. When you can have it in such an explicit way, it’s very easy to track where the holes are, what you need to expand upon, and it’s become a much bigger focus for us recently.”

Pitch competitions are another great opportunity to gain exposure for your VC firm. These competitions often need judges and if you can partner with an accelerator or act as a mentor in that capacity, you’ll be the first point of contact for the attending founders. 

Finally, hosting small private networking events or meetups is another value-driven way to help you build relationships with co-investors, VC firms, and other important players in your ecosystem. 

5. Increase your online engagement

While there’s been a gradual shift to a hybrid event and networking model over the last decade, the COVID-19 pandemic marked a notable pivot in the dealmaking landscape. The VC firms that were able to take their deal and relationship management online quickly were able to better adapt. 

This digital transition has remained strong, allowing VCs to build relationships that supersede geographic locations and go beyond core markets. “So many of the vertical software exits in particular I'd say were not necessarily San Francisco, or even New York based, but might be Southern California based, even Boston or Ottawa or Vancouver, for example,” highlights Dadi. 

He continues, “As a result, there's a larger class of investors who are thinking about leaving the basic, core markets of San Francisco and New York, and expanding their aperture outside of that—whether it be in North America, Europe, or elsewhere.”

Remaining active online, sharing insights into your investment process, and connecting with new people will help unlock opportunities beyond your immediate market and grow a larger network organically over time.

There are many ways to generate online engagement that can grow your network organically and drive long-term portfolio growth. Some strategies that VCs use to build a digital presence include:

Email newsletters

Email is a great way to get into the inboxes of key individuals. However, 1:1 email outreach isn’t always the best way to capture the attention of potential portfolio companies.

Newsletters are an easy way to distribute your content and provide value to the people in your network. A great example is the newsletter put out by First Round Capital, First Round Review. It’s not just a newsletter, rather it’s a hub of resources, advice, and insights geared toward startup founders—getting them into the inboxes of key contacts and laying the groundwork for future deals. 

Whether you share updates on your deal sourcing journey, spread the word about your existing, or simply round up trends and industry news, newsletters are a great way to build loyalty—and even generate leads.

Thought leadership

Establish your firm’s expertise by publishing blog posts, LinkedIn articles, or other types of content that relate to your investment thesis. European VC firm, Atomico, takes it a step further with their State of European Tech report. The report goes beyond their own portfolio and dives into the challenges, insights, and trends of the broader European tech ecosystem, establishing the firm as a trusted industry leader.

But thought leadership can also be niched down into your own industry and portfolio. By creating content and sharing insights on your investment process, it creates a sense of transparency around your firm and the types of opportunities that you’re looking for—which can influence your inbound and outbound deal sourcing efforts. 

Social media

Social media is a great way to amplify your content and build a digital presence for your firm. 

But social media goes beyond just posting content. It’s a way to expand your network. More business-oriented platforms like LinkedIn and X can help you connect with VCs, entrepreneurs, and other individuals that can turn into lucrative opportunities. 

VC firms, like RedPoint are also experimenting on traditionally B2C platforms, like TikTok to attract younger and more future-forward startups. 

Podcasting

Whether it’s joining as a guest or starting your own podcast, podcasts can help give your firm a voice in your most important circles. It positions you and your firm as an expert within the venture capital space or even in a specific industry. 

Podcasts are a good way to diversify your content and increase visibility for those who prefer to listen to content over reading it. They can also feel more intimate than other forms of digital content, giving you an opportunity to deep dive into a specific topic. 

Prime Venture Partners does this extremely well, with a podcast geared toward their target prospects, which are early-stage entrepreneurs. Their library of content includes everything from interviews with industry experts, to conversations about industry insights. It also doubles as a platform to amplify thought leadership and increase exposures for founders within their own portcos.

Webinars

Like podcasts, webinars help put a face to the name. They’re great for building brand awareness for your firm and give you a platform to establish authority while interacting in real time. 

Webinars add value to those in your network, but they can also attract leads that can generate referrals or even lead to future deals. In many cases, they also provide data to inform your deal sourcing efforts. “We get signals from our own webinars and our newsletter,” says Sergio Monsalve, Founding Partner at Roble Ventures. “We understand who's opening what and that suggests what an advisor or an angel or a potential entrepreneur is interested in. We can then use that information to segment our database in Affinity.”

6. Lean on data to make better decisions 

Affinity’s private capital predictions report for 2025 found that nearly half (46%) of respondents believe that data can be used to make their deal sourcing more efficient.

The wealth of contact and deal information you gather from outbound sourcing and relationship building needs to be measured so you can understand its impact on your business. ‘Data-driven investing’ is becoming the norm, with platforms like Pitchbook and Crunchbase must-have pieces of the VC tech stack. AI and machine learning also continue to gain relevance for investment teams across VC firms, private equity firms, and investment banks. 

The reality is that your team has access to more data than ever before. This means there’s more information available to make better-informed investment decisions; it also means there’s more noise, so you have to focus on finding the right signals.

​​Alexander Ross, General Partner at Illuminate Financial, shares the types of data sources his VC firm evaluates at the early stages of a deal: “Right at the top of the funnel, we have a number of data sources, which typically tend to be signals like number of employees—so growth in the number of employees, mentions of certain keywords, or certain partnerships being announced—to help refocus or bring our attention back to businesses that sit on our monitor list.”

To help your team move faster, you can use the data gathered from all these sources to quickly source investment opportunities that align with your firm’s goals. Guide how you use the data by setting clear objectives and establishing metrics to measure against. 

With a smaller pool of high-quality investments on the market, better defining your investment targets, tightening your due diligence processes, and focusing on more relevant deals can keep your firm ahead of the competition. 

7. Invest in technology built for VCs

Things invariably get complicated as your team grows its network, increases the places it actively sources from, and gathers more data to inform investment decisions. Analyzing your current deal flow management and process can highlight opportunities for places you can optimize to move faster and more effectively. 

Does your team hastily scribble phone numbers on sticky notes and the backs of scratch paper? Maybe you have a large, traditional CRM that no one really uses? When this information only lives in the minds of an individual on your team, data silos prevent your firm from working together effectively to move deals through your pipeline.

Technology can help, but there are hundreds of tools available in the market for VC tech stacks. As a result, many teams are trying to find ways to consolidate and connect their existing tools to streamline their deal workflows. A good way to approach this is by building on a tech foundation that works the way you do. 

As Sven Rossman, Chief Investment Officer at ABACON CAPITAL puts it, “We knew that we wanted to build up a tech stack that reflected how we did business in a relationship economy.” 

ABACON CAPITAL and other leading firms are choosing to invest in relationship intelligence platforms that give teams a single place to store and access their collective network information. Acting as contact and deal management platforms, they also provide insights about that organization’s shared business network to drive how dealmakers spend their time finding, managing, and closing deals.

By connecting workflows and technology through a platform designed to help you find, manage, and close deals, your team can capitalize on its growing network and accelerate its deal flow pipeline. 

Support your deal flow with the CRM designed for dealmakers

Affinity is the CRM designed to help dealmakers increase and manage their deal flow. Affinity empowers teams to focus on building the relationships that drive deals and efficiently move deals through the investment process.

• Update and track every deal with ease: Spend less time making manual updates and more time adding new opportunities to your deal flow. Affinity automatically captures every email, meeting, and note directly into your CRM so you know exactly where every deal stands at all times.
• Find the right deals, faster: Easily access the relationship intelligence and network insights to surface warm paths of introduction and referrals that close deals up to 25% faster, right within your CRM.
• Increase deal flow efficiency with AI: Generate error-free discussion notes and clear action items with Affinity Notetaker. Then easily surface this data, along with deal insights, with Deal Assist to conduct due diligence and make decisions with confidence throughout the life of a deal.
• Optimize deal sourcing: Identify your best channels of deal origination and optimize your deal flow strategy by surfacing valuable insights into your deal pipeline. 
• Grow your network: Create paths to your biggest opportunities with access to a complete history of every contact and company in your firm’s collective network—without spending all your time manually updating your CRM.

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Deal flow FAQs

What is a deal flow strategy?

A deal flow strategy is a VC firm’s plan used to source and find high-quality investment opportunities. This includes outbound and inbound deal sourcing and networking efforts that will help maximize deal flow.

Deal teams typically rely on their investment thesis to inform how they qualify startups and investment opportunities. The goal is to generate as many potential opportunities as possible, in the knowledge that only a few of them will turn into closed deals.

How can you increase deal flow?

Some ways you can increase VC deal flow include:

1. Sourcing referrals from trusted investors and partners
2. Reaching into your current portfolio
3. Getting referrals from service providers
4. Expanding your networking activities
5. Building your online presence
6. Using data to drive deal flow
7. Adding technology for VCs to your tech stack

What is an investment thesis?

An investment thesis is an analysis that outlines a VC fund’s investment strategy. It indicates a fund’s investment criteria, makes a case for why those opportunities will generate a return, and outlines how the firm will source opportunities that fit that criteria.

The investment thesis is critical to the deals process as it informs how teams evaluate and qualify potential deals. 

What is a CRM for venture capital?

CRM for venture capital is software built to help VC firms find, manage, and close deals. It goes beyond simply capturing contact information and sending emails. The right CRM can help dealmakers stay on top of the relationships that drive deal flow and centralize the data needed to successfully close more high-quality deals. Use the VC CRM checklist to choose the right platform for your firm.