In VC, like most everything else, ultimately the only thing that matters is points on the board. That’s certainly not measured by sourcing opportunities and it’s not even measured by making investments (gimme that DPI, baby!). But having some kind of KPI along the way is valuable to at least hold yourself accountable and keep improving.

So here’s some direct insights from my deal activity to hold myself accountable:

With some simple pipeline analysis on Affinity, I found that in 4Q 18 I sourced ≈1.25 new deals/day. That’s held or gone slightly up thus far in 1Q 19. But the rate at which I’ve socialized deals internally dropped from 36% in 4Q 18 to just under 12% in 1Q 19.

Am I seeing lower “quality”/less aligned opportunities or has my screening gotten too tight?

That’s tough to answer and the truth is likely in between. The easiest way to start testing this is to compare the industry breakdown over the two periods. But there’s not meaningful change so that doesn’t explain anything. But a null hypothesis doesn’t seem right; the Ns are sizable and the delta is so big.

Even if you chalk this up to some messy data and haircut the delta by 50%, you’d still be looking at a ≈33% decline. Something is different.

So what’s going on?

Here’s what I’m thinking: this is very hard to precisely quantify without more work than I want to do, but my outbound sourcing volume has decreased even as my overall deal volume has demonstrably remained flat or even increased. So more stuff is coming to me even though I’m doing less work to see it. Sounds like a good deal right?

Wrong. If socialization reflects quality, quality has gone down. It's plausible that the best stuff I see, I see because I find it proactively. So even if it appears more efficient to let deals come to me, I have to be actively hunting to find and get access to the best stuff.

In short no one will do your work for you and I wouldn’t want to be a member of any club that would have me.

There’s a number of potentially confounding variables (especially the work I’ve been doing with pre-seed/founding companies) and I can explain how I define terms (just sending a cold email doesn’t count as seeing a deal) but certainly this gives me a lot to think about.