How to Find Startups to Invest In: A Sourcing Guide for Investors
Returns in early-stage investing are decided at the top of the funnel. An investor with mediocre deal flow and excellent judgement will underperform an investor with excellent deal flow and average judgement. Sourcing is the job.
Write your thesis down and publish it
The cheapest way to improve deal flow is to make it obvious what you invest in. A published thesis, stage, sector, cheque size, geography, what you will not do, filters out the mismatched pitches and attracts the right ones.
Investors who publish a focus on a marketplace receive materially more relevant pitches than those who stay private, because founders self-select before they contact you.
Build proprietary flow, not competitive flow
Anything you see on a widely circulated list is already priced. Proprietary flow comes from places where founders arrive before the crowd:
- —Curated marketplaces where founders publish profiles and pitch directly.
- —Operators in your sector who see problems before they become companies.
- —Accelerator cohorts, tracked before demo day rather than at it.
- —Founders you have already passed on: the second company is often the one.
- —Communities and forums where technical builders publish their work.
Screen in ten minutes, not ten days
A fast, consistent first screen protects your calendar. Five questions answer most of it:
- —Is this team unusually well matched to this specific problem?
- —Is there evidence a customer will pay, not just that they said they liked it?
- —Can this plausibly become a very large business, not merely a good one?
- —Does the round structure and valuation leave room for a real return?
- —Would I be happy to spend the next eight years with these founders?
What to check in diligence at the earliest stage
Early-stage diligence is short but not optional. Verify incorporation and cap table, confirm the two strongest customer references personally, stress-test the top-line metric definition, and check the founders' account of their own history. Most early-stage losses come from team problems that were visible in references.
Make it easy for founders to reach you
The best founders have options and are pitching a short list. If reaching you requires three introductions, you will not be on it. Investors on Investor Picks join free, publish their focus, browse screened companies in The Index, and receive pitches directly from founders who chose them specifically.
Frequently asked questions
Where do angel investors find startups?
Curated investor marketplaces, angel groups and syndicates, accelerator cohorts, sector communities, and referrals from other investors and operators. Marketplaces have grown fastest because they remove the geographic limit on deal flow.
How many startups should an angel investor look at before investing?
Experienced angels typically review fifty to one hundred companies for every investment they make. Consistent, fast screening is what makes that volume manageable.
Is it free for investors to join Investor Picks?
Yes. Investor membership on Investor Picks is free, permanently. Investors create a profile, browse every company in The Index, and accept or decline pitches from founders at no cost.
How do I evaluate a startup with no revenue?
Assess team-market fit, evidence of demand such as pilots, waitlists or letters of intent, the size of the problem, and whether the milestone the round buys will genuinely de-risk the business.