As an early-stage VC investor, we source 1,000s of startups and review 1,000s of decks every year. To “bet” on the early-stage startups, which are often very risky, we need to diversify our portfolio as much as possible. For early-stage VC investors, high-quality sourcing funnel is the key to success.
Different sourcing channels have different pros and cons. For example, deals coming from personal referrals usually have the highest quality. However, we cannot rely on this channel alone as it is very opportunistic. On the other hand, the quality of the companies sourced from public sources varies a lot. However, we can still find some good leads every now and then.
To conclude, for early-stage VC investors, they need to leverage different sourcing methods to find the best deals – for a higher return – and diversify the portfolio – to reduce the risks.
When I joined Plug and Play Ventures, I realized that we were spending so much time manually going through different databases and news websites to source deals. The process was very manual and mechanic. Why couldn’t we develop something to automate the sourcing process and leave more time for our life?
That’s why I developed PNP Plus at the very beginning by building a crawler to source the latest startups automatically from databases such as Crunchbase, AngelList, CBInsights, StartupNation, and PitchBook.
After building PNP Plus for one year, I have added many new features to the tool, and our team likes it a lot! Then I decided to make a public version of it to provide a new sourcing channel to more VC friends.
I name it Avocado simply because I love eating Avocado and I once sourced a great startup called Avocado from PNP Plus. The website was launched in early June 2020 and can be accessed here: https://avocado.vc. Feel free to login with your Google Account.
Here are some more details about its features.
Tracker
Tracker is the first thing that I built for sourcing. It automatically collects the latest startups from the mainstream databases such as Crunchbase, CBInsights, StartupNation, and Funding Roundup spreadsheet. Previously, it also checks AngelList, while the site shut down its startup database in May 2020.
Database
We have subscribed many databases. However, accessing those databases such as PitchBook is often inconvenient. To help people get an alternative startup database when they cannot access PitchBook, I indexed the public data offered by Tracxn, another great startup database, and made it searchable.
Founder
As an early-stage VC investor, we do know how important the team is to a startup. When we make an investment into a company, we are 70% betting on the team and 30% betting on the market.
However, it is difficult to find the best teams and find them early before they move to a big Series A. That’s why I came up with an idea of sourcing those promising founders from LinkedIn.
“Founder” does this job for us automatically by continuously sourcing profiles who have the keywords such as “founder” and “stealth-mode”, who graduated from the greatest schools such as HBS, Harvard, MIT, Yale, GSB, Stanford, Wharton, and Princeton, and/or who worked for the greatest companies such as Google, Apple, Facebook, etc.
As of July 2020, there are about 9,000 profiles sourced by “Founder”, and we did find some great teams from these leads.
Hacker and News
“Hacker” sources the latest hacker ideas from the YC forum, while “News” aggregates the latest tech/VC-related news and blogs from 10+ mainstream websites and newsletters, saving us a lot of time to read those information in different places.
In the future, I will add more features if we come up with more interesting ideas. Feel free to let me know if you have any great idea about early-stage startup sourcing!