DocSend looked at 175 seed stage startups and split them by outcome. The founders who closed a round had contacted 77 investors and taken 40 meetings. The founders who did not close had contacted 70 investors and taken 15.
Seven more emails. Twenty five more meetings.
Both groups did roughly the same amount of outreach. One group’s messages reached a human being and the other group’s did not. The thing that separated them is not effort and it is not deck quality. It is the warm introduction, and nobody in venture has ever put a price on it.
The thesis
The warm intro is not a courtesy. It is a sorting mechanism, and it sorts on affinity rather than on quality. Founders pay for it in meetings they never get. Investors pay for it in returns, and the second half of that sentence is the part the industry has never accepted.
I have a stake in this. I co-run Capitaly.vc with Houman, which exists because we thought this market clears badly. Read the rest knowing that.
What the sourcing week actually looks like
Paul Gompers, Will Gornall, Steven Kaplan and Ilya Strebulaev surveyed 885 institutional venture capitalists at 681 firms. It remains the largest structured look inside the job.
Their reported week runs 55 hours. Of that, 22 hours go to networking and sourcing and 18 go to working with portfolio companies. Sourcing is the single largest block of the week.
Where the deals come from is more revealing. Over 30% are generated through professional networks. Another 20% are referred by other investors. 8% come from a portfolio company. That is 58% of deal flow arriving through a relationship. Only 10% comes inbound from company management. Almost 30% is proactively self generated.
The funnel underneath: roughly 100 opportunities considered for every investment closed. One in four leads to a management meeting. One third of those reach a partners meeting. About half of those proceed to diligence. Firms offer 1.7 term sheets for each deal they close, and the median firm closes about four investments a year.
Now the number that should be uncomfortable. Asked which of the three things they do contributes most, 49% of these investors said deal selection, 27% said post investment value add, and 23% said deal flow. Forty percent of the working week goes into the activity they themselves rank last of three.
That is only irrational if you believe the network is a sourcing tool. It is not. It is a screening tool wearing a sourcing costume. An introduction carries something a cold deck cannot carry: a named person spending their own reputation on your behalf. It performs diligence before diligence, at zero marginal cost to the investor, using a credential the founder did not earn and cannot buy.
That is why it survives. It is genuinely useful to the person holding the cheque. The cost sits with people who are not in the room.
What it costs the people collecting it
The affinity part of this has been measured, and it was not measured on founders. It was measured on investors introducing each other.
Gompers, Vladimir Mukharlyamov and Yuhai Xuan studied 3,510 individual venture capitalists across 11,895 portfolio companies from 1975 to 2003. They asked a simple question: when two investors share a background, are they more likely to work together, and does the deal do better.
The answer to the first half is yes, strongly. Two VCs who worked at the same firm previously are 64% more likely to co invest. Two who went to the same undergraduate school are 42.5% more likely. Two from the same ethnic minority group are 22.8% more likely.
The answer to the second half is the interesting one. Success, defined narrowly as the portfolio company reaching an IPO, falls. Same previous employer costs 18 percentage points. Same undergraduate school costs 22 points. Same ethnic minority group costs 25 points.
The split inside that paper is the whole argument. Similarity based on ability, such as both partners holding degrees from top universities, improves outcomes by 9 to 11%. Similarity based on affinity destroys them. The network sorts on the second kind and pays for it in the first.
PitchBook surveyed 391 venture investors across the US, Europe and Asia and found 82% naming personal networks as their most valuable sourcing resource, against 44% for inbound and 36% for financial databases. Only 38% used data to source all of their opportunities. That survey ran in Winter 2018 and I would expect the data number to be higher now. I would not expect the 82% to have moved much, because the underlying incentive has not moved at all.
I built D30 for the listed version of this problem. It pulls three statement fact files out of ASX annual reports and runs articulation gates over them, so a company reaches a shortlist because its numbers tie, not because somebody vouched for it. Private markets have no equivalent instrument. They have a phone.
Australia makes the geometry worse
Cut Through Venture reported $5.1bn across 390 deals for Australian startups in 2025, published 3 February 2026. That is a 24% lift on the prior year and the third largest funding year on record. It is also 390 deals. A market that size has one degree of separation inside it, not six.
In the same data, female founders took 24% of deals, down from 28% in 2024. Series A is worse. That is what an affinity sort looks like when it runs at national scale for a decade: not a policy, not a conspiracy, just the accumulated output of a filter that rewards proximity to people who already have capital.
66% of 2025 deals included an international funder. Australian founders are increasingly raising from people who are structurally outside the local network. That is the tell. When the local sort is thin, founders route around it, and the routing costs them 25 meetings.
Where this breaks
Three places, and I want to be precise about them.
The Cost of Friendship measures co investment between investors, not introductions to founders. It also ends in 2003. I am transferring a mechanism, not a coefficient. Anyone who quotes 18 percentage points as the cost of a warm intro to a founder is misusing the paper, including me if I did it.
The intro is a real signal, not only an affinity artefact. A person who introduces you has read enough of your business to risk being wrong in front of someone whose opinion they need next quarter. That is information. A filter that is 60% accurate and free beats no filter when you are reading 100 opportunities to make four investments a year.
And the counterfactual is not open access, it is a different filter. Remove intros and the volume does not vanish, it lands somewhere. Every investor who has opened submissions has closed them again within two years. The honest version of my argument is not that the intro should go. It is that it should be one input among several, and that right now it is the gate.
What I would do on Monday
If you are raising:
Count your ratio, not your outreach. Contacts to first meetings is the only number that tells you whether you have an access problem or a business problem. Below 30% and the deck is not the issue.
Build the intro asset before you need it. Operators inside the portfolio companies of your target funds are the 8% referral channel, and they answer.
Publish the thing only you know. Proactive sourcing is 30% of deal flow. Being findable by a partner running a thesis search is the one channel that does not require permission.
If you are investing:
Instrument your own funnel by source. Split closed deals by professional network, other investors, portfolio referral, inbound and self generated, then look at outcomes by source three years later. Most firms have never run this and it takes an afternoon.
Cap the affinity channel deliberately. Not on principle. Because the published evidence says the correlation between how a deal reached you and how well it does is negative in exactly the channel you use most.
Close
77 investors and 40 meetings. 70 investors and 15 meetings.
The second group did the work. They just did it into a system that was never reading.
Capitaly connects founders and investors without the warm intro tax. See it here.