Venture capital triage process, part 2: Objective signals, strategic priorities and compelling factors

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Objective signals

Here are the objective signals to look for as you’re screening incoming deals. Keep in mind that objective signals are very rare.

Strategic priorities

Because signals are rare, you can’t build a healthy pipeline if you wait for them. So if there are no signals, check the list of the most challenging and strategic problems for the industry you are responsible for. This list will vary from one firm to another, and it will normally change every 6–12 months, although some challenges hang in there for decades.

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Compelling factor (Sense of urgency)

Once you have identified a startup with clear market signals and/or strategic priorities, you need to make one final check: How urgent is the decision about it? Does your firm have to make a decision now, or can it wait? If it can wait, can it wait until next week? Next month? Next year? And what changes could occur that might make the investment decision urgent?

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