What Is Deal Flow in Venture Capital?

Understanding deal flow: how VCs source, evaluate, and track startup investment opportunities.

Deal flow is the lifeblood of venture capital. It refers to the stream of investment opportunities that a VC firm evaluates. The quality and quantity of your deal flow determines your returns.

Deal Flow Sources

• Inbound: founders pitching you directly
• Network: referrals from other investors and founders
• Outbound: your team actively sourcing deals
• Signal-based: using data to identify companies before they raise

Why Signal-Based Deal Flow Wins

Traditional deal flow relies on who you know. Signal-based deal flow relies on what the data tells you. The best investors use both, but signal-based sourcing gives you access to deals that never enter the referral network.

Frequently Asked Questions