To address the data challenge in deal-sourcing, top VC firms are investing heavily in in-house platforms to aggregate data signals and identify opportunities early. While building custom solutions can provide a unique edge, the article advises firms to focus on buying existing solutions for efficiency unless they can create truly proprietary datasets. Looking ahead, there is cautious optimism for a rebound in 2025, supported by expected increases in deal activity and favorable U.S. monetary policy, although challenges in finding high-quality deals persist.
Key takeaways:
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- Venture capital deal-sourcing is becoming increasingly challenging due to a slowdown in funding and a shift towards investments with strong fundamentals.
- Data-driven sourcing strategies are essential for staying competitive, with top firms using alternative signals like head count and web traffic to identify high-potential startups.
- Building a tech stack for data-driven sourcing can be costly, and firms should focus on unique edges rather than reinventing existing solutions.
- There is optimism for a rebound in deal activity in 2025, supported by expected interest rate cuts and positive sentiment among dealmakers.