Sources of Deal Flow
A fund's or group's deal flow is generated from many sources. The most valuable referrals often come from entrepreneurs or companies in which the fund has previously invested; from other funds looking to syndicate a deal; and from professionals (such as attorneys and accountants) who are familiar with the fund's investment criteria. Other sources of deal flow are investment bankers and "finders", who expect to receive a fee (from either the company or the investor) for making the introduction.
Many funds and groups (but not all) will also accept business plans "over the transom", that is, as an unreferred submission from a company with no previous relationship with the funding organization. In practice, however, such unreferred plans are usually much less likely to receive funding.
In order to create and maintain a sufficient deal flow, venture capitalists and angels spend much of their time doing business development, raising their profiles by giving speeches, writing blogs, and networking with others who also work with early stage companies. VCs and angels also regularly attend conferences and "venture fairs" where multiple companies pitch their businesses to investors.
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