Venture capital triage process, part 1: There are more similarities between a military hospital and a venture fund than you might think

By Pavel Cherkashin

[Almost confidential] Internal instruction for beginning venture analysts on how to quickly sort through incoming deals

Source: Shutterstock


Young venture capitalist complains to an older colleague about the huge pile of pitch decks that need to be processed.

Older colleague takes half of the documents and throws them in the trash can.

“What are you doing? What if our next unicorn was there?” cries the younger one in panic.

“Forget them! We don’t invest in losers!” says the older one.

Why VCs need a triage process

An average venture fund receives 3,000–5,000 startup pitches every year. On a single busy day, such as after a large event or a media appearance, the corporate inbox can be flooded with many hundreds of requests: Startups contact you directly, co-investors invite you to join their rounds, accelerators throw whole batches of pitches on the battlefield, and that cute person you thought was into you turns out to have a startup they want to pitch as well.

There is no way for fund partners to review all these incoming requests, formulate a weighted and thoughtful decision, and give reasonable feedback. The good news is that in the world of brutal capitalism, you don’t have to. Forget the losers; focus only on the winners.

It’s helpful to consider an analogy. A century ago, during World War I, military hospitals had a similar problem: insufficient resources to treat all incoming patients equally. All the experienced doctors were busy doing surgery, so lesser-qualified staff had to sort and prioritize newcomers following a standard set of rules. Should this person be sent for surgery immediately? Could they wait their turn? If so, for how long? Or would they require a priest rather than a doctor?

This process is called triage, and during the past century, it has been widely adopted by hospitals and emergency rooms around the world. Venture capital firms develop their own triage processes to identify and prioritize opportunities that shouldn’t be missed and not waste their limited resources on the rest.

The typical VC triage process

The default triage process for a venture fund looks like this:

Simply put, most the venture funds simply don’t consider any incoming requests; they focus exclusively on proactive search for opportunities (which are normally found within a 15-minute bike ride distance from their office).

More sophisticated VCs integrate an automated response system, but the outcome is the same:

A more thoughtful VC triage process

Some funds are more responsive to incoming requests, especially when they are in active investment mode or on the hunt for deals of a specific type. In this case, the triage process looks more like this:

This process is quick — just 30 seconds or so for each item. There is no time for formal evaluation of the market, business model, credentials, patents, etc.; the associate or intern simply decides whether the project is worth considering further. This triage process enables the VC to make sure all incoming requests receive proper screening while reducing bureaucracy and expenses.

The outcome of the triage process is a system of flags, similar to those a nurse would put on a soldier’s foot at a war hospital:

· Immediate Action (Surgery)

· Curiosity Folder (Can wait)

· Trash Can (God help them)

To quickly tag a project, the associate must answer these questions:

· Do you see any objective signals* that the project might be a success?

· Does the project claim to solve any of the strategic priorities*?

If the answer to both of these questions is “no” or “I don’t know,” throw the project in the trash and move on to the next one.

If the answer to either one is “yes” or “maybe,” check for compelling factors* that impart a sense of urgency. Based on that, flag the item for immediate action (a meeting, research, request for more information, etc.) or put the project on hold in the curiosity folder until a compelling factor emerges.

I estimate that fewer than 100 of the 3,000 pitches a VC gets each year end up anywhere but the trash can. Of those, just 10–20 have a compelling factor that merits immediate action.

Remember that the goal of the triage process is simply to screen the incoming deal flow and build a pipeline of interesting projects. After that’s done, the real process of making investment decisions can start, which includes analyzing factors such as the startup’s team, market, risks and competition.

*In the next post, we will review in detail what objective signals, strategic priorities and compelling factors to look for during the triage process.


Pavel Cherkashin is a cofounder and a managing partner at Mindrock Capital and a managing partner at GVA Capital. A former angel investor and entrepreneur, he now invests in cryptocurrency, artificial intelligence, blockchain and self-driving tech.



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