The short answer: Velo Labs met 160 founding teams in a few months, and we would invest in fewer than 5 of them. That is about the selectivity of a venture fund: in a survey of nearly 900 venture capitalists, Gompers and colleagues found that for every deal a fund closes it considers about 100 opportunities and meets about 25 management teams. What lets a studio decide at that pace is a repeatable process behind every meeting, and data that builds up with each conversation. The few teams we pick share three things: exceptional execution, a first customer they can name, and an advantage that is hard to copy.
The question
This week someone asked me: "You met 160 teams. How many of them would you actually invest in?" My answer was fewer than 5, under 3% of the teams we met. The number sounds harsh until you set it next to how professional investors work.
How it compares with venture funds
The most cited study of how venture capitalists decide is a survey by Paul Gompers, Will Gornall, Steven Kaplan and Ilya Strebulaev, published in the Journal of Financial Economics in 2020, with 889 institutional VC respondents. Their funnel, for each deal a fund closes:
- About 100 opportunities considered.The median firm considers roughly 100 deals for every one it invests in.
- About 25 management teams met.One in four opportunities leads to a meeting with the team.
- A third of those reach a partner meeting,about half of those go to due diligence, and about a third of those get a term sheet.
- About 4 deals a year.The median firm closes about four investments a year.
So a fund says yes to roughly 4% of the teams it meets. Our fewer than 5 out of 160 sits in the same range. The difference is the pace: we met 160 teams in a few months, which is more than a typical fund meets in a year.
What a venture studio is, and how it differs
A venture studio builds companies together with their founders. It works inside the company on customers, go-to-market, hiring and the round, and takes equity for that work. A fund invests capital and supports from the board. An accelerator runs a fixed program for a cohort. For a detailed comparison including equity, see venture studio vs accelerator vs VC, and for the studios operating in Israel, our guide to venture studios in Israel.
| Model | What you get | What it costs | Fits when |
|---|---|---|---|
| VC fund | Capital, a board seat, the fund network | Cash for equity, priced or SAFE | You have traction and a clear plan for the money |
| Accelerator | A fixed program, cohort, demo day | Usually a small check for a fixed stake | You want structure and a cohort for a few months |
| Venture studio | A partner working inside the company every week | Equity, terms set per company | You want a hands-on partner on customers, go-to-market and the round |
Velo is an equity partner in every company it builds with, and is building Velo Fund 0 to back selected companies. That is why selection matters so much to us: every company we take on gets weeks of our time, so we choose the way an investor chooses.
Building a company and want a partner inside it?
The Velo Venture Studio works with a small number of pre-seed and seed teams, every week, on customers, go-to-market and the round. Tell us what you are building.
Apply to the Venture Studio How the studio worksWhat happens behind every meeting
A first meeting is one step in a process that gets sharper every week:
- Before the meeting.Research on the founders and their track record, the market, the funded competitors and the investors active in the space.
- During the meeting.We listen for what is proven and what is still a claim: customers, revenue, pilots, the team's history together.
- After the meeting.A structured evaluation of team, product, market and evidence, with the open questions written down, and a clear outcome: build together, keep in touch as the company progresses, or pass with honest feedback.
Every conversation goes into a unique dataset we are building: what founders say at the earliest stage, how teams progress over time, and which funds invest at which stage and in which sector in Israel. We built AI systems that turn hundreds of conversations and sources into a consistent evaluation, so our judgment gets sharper with every team we meet. The same data powers our public research, such as The Israeli VC First Check Report.
Four things 160 teams taught us
- 1. Team, team, team.There are many smart people. We look for exceptional execution, a deep understanding of the problem, and how fast the team learns and adapts. In the Gompers survey too, 47% of venture capitalists named the team as the most important factor, ahead of business-related factors combined at 37%.
- 2. A big market is the starting point.Almost every deck shows a market worth billions. Far fewer founders can say who the first customer is, why they need it now and how the company reaches them. That answer tells us more than the market slide.
- 3. The question is what is hard to copy.As building a product gets cheaper and faster, the advantage moves to distribution, data, relationships and speed of execution. We ask what a well-funded competitor would still struggle to replicate in a year.
- 4. Capital is the beginning.We pick companies where we can add real value beyond money: opening commercial doors, sharpening decisions, building processes and speeding up execution. If we cannot name what we would change in the first 90 days, we are the wrong partner.
How founders can prepare for a studio conversation
- Bring evidence over adjectives.Customer conversations, a pilot, a waitlist, a letter of intent. One real data point beats a page of projections.
- Name the first customer.A specific company or role, why they need it now, and how you reach the next ten like them.
- Know why this team.What in your history makes you the people to solve this problem, and how you have worked together.
- Say what you need.Customers, a go-to-market plan, a round, hires. A studio is most useful when the gap is clear.
Not ready for a studio yet? Our guides on what investors look for before a seed check and moving from employee to founder cover the earlier steps.