Proactive Deal Sourcing

Filed in archive Venture Capital on September 17, 2005

The Young Venture Capital Society posts in its latest newsletter about a rather new deal sourcing strategy:

"When was the last time you were excited to receive a telemarketer's call? Well
for most of us, the answer is never. However some people, such as entrepreneurs seeking
capital, will be very glad to receive the call. Why? Because some Venture Capital
("VC") firms have adopted a form of proactive deal sourcing known within the industry
as "Smile N' Dial".

Venture capital firms have turned to proactive deal sourcing because of their
desire to remove the reliance on external sources (e.g., business brokers, broker dealers,
advisors, etc.) and more efficiently integrate the process from identification to
investment.

Using this technique, an associate in a venture capital firm is given the
responsibility of identifying potential companies that fit the firm's investment criteria.
While viewed with condescension in other businesses, some associates value the
opportunity to connect with executives in this fashion. One Boston based VC associate
stated "...calling is a great way to become knowledgeable on an industry and provide
associates with exposure to companies".

Read on (PDF only).