Find, Pick, Win Venture Investing Model
Build venture performance by sourcing, selecting, and winning investments
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 93%
The model divides venture investing into three disciplines. Find means discovering promising companies early enough to participate. Pick means applying judgment to decide which opportunities have sufficient potential and fit. Win means persuading the founders to accept the investor's capital and desired terms when the opportunity is competitive. Treating the stages separately exposes whether poor results come from weak sourcing, flawed selection, or an inability to secure allocation. The episode also argues that increasing information availability can make finding and picking feel more commoditized, shifting competition toward winning. Investors should resist collapsing the model into deal persuasion alone, because privileged access cannot rescue consistently bad selection and broad sourcing cannot create returns without conversion.
Origin
David Rosenthal described the model while discussing how private-market competition changed as companies delayed IPOs.
Core principles
- 01Investment performance requires access, judgment, and conversion
- 02Finding a company is different from deciding to invest
- 03A correct decision creates no return if the investor cannot win allocation
- 04Market transparency can commoditize sourcing and selection advantages
- 05Investor differentiation should be tested at every stage
How to run it
- 1
Find qualified opportunities
Build repeatable channels for identifying companies that match the fund's stage, sector, geography, and return profile.
Pro tip Track which channels produce investments rather than merely meetings.
Watch out Visible or fashionable companies are not automatically suitable investments.
- 2
Pick with independent judgment
Evaluate the company, market, team, economics, and downside before deciding whether to invest.
Pro tip Write the investment case before learning how competitive the deal is.
Watch out Competition can create urgency that substitutes for judgment.
- 3
Define a founder value proposition
State why the company should choose this investor beyond the offered price and brand.
Pro tip Tie the pitch to specific company needs the investor can credibly address.
Watch out Generic promises of introductions or support rarely differentiate a firm.
- 4
Win the allocation
Build trust, move decisively, and negotiate terms that both sides can accept.
Pro tip Make decision speed a designed capability rather than an improvised reaction.
Watch out Winning through price alone can destroy expected returns.
- 5
Audit the funnel
Measure results at each stage and improve the specific constraint limiting completed investments.
Pro tip Review missed deals by separating find, pick, and win failures.
Watch out Do not label every lost deal a sourcing problem.
In the wild
A fund discovers a promising developer-tools startup through its technical network, independently validates the market and team, and decides to invest. Because several firms are interested, the partner demonstrates relevant operating expertise and commits quickly rather than relying on brand alone.
→ The fund succeeds across all three disciplines and earns an allocation without offering the highest valuation.
An investor regularly meets excellent founders and correctly identifies eventual category leaders but rarely enters their rounds. A funnel review shows that the investor communicates slowly and offers no differentiated help after the check.
→ The investor identifies winning, rather than finding or picking, as the process constraint.
Common mistakes
Treating visibility as sourcing skill
Finding widely discussed companies is not differentiated sourcing when every competing investor sees the same opportunities.
Letting competition replace judgment
A crowded round can influence conviction even when the underlying investment case is weak.
Winning solely through valuation
Repeatedly offering the highest price may improve conversion while reducing the returns that make winning worthwhile.
Is it for you?
Best for
It is best for venture firms and angel investors diagnosing sourcing, judgment, or deal-conversion performance.
Not ideal for
It is not ideal for passive public-market strategies where negotiated access is unnecessary.
From the transcript
“there's there's sort of three things that a venture capitalist does, and I didn't make this up, but uh uh you know, lots of people…”
“you find comp one, find companies, great companies, two, you know, pick them, decide, you know, if you're gonna invest or not, if you if…”
“it used to be that like those three disciplines were like all really important, and now like at least the belief is that it's all…”
From the episode
The Facebook IPO