What the VC process actually looks like

By Daniel Uusitalo, Investor at 4impact capital

From the founder’s side, a fundraise looks like this: you send a deck, you get a call, then silence, then maybe another call, then a comprehensive material request or a no. What you cannot see is that most of the process happens in rooms you are never in. Processes vary between funds, sometimes considerably, but the shape below is a reasonable baseline. Once you know it, a lot of confusing investor behaviour starts making sense.

Stage one: screening, measured in minutes

A VC fund may see a thousand companies in a year and begin evaluating perhaps 200 to 300 of them, on its way to a handful of investments. The arithmetic of that funnel means the first look at your deck lasts minutes, and it is not a judgement of your product. It is an elimination round on mandate: stage, geography, sector, round size. Most companies exit the funnel here, and most of them exit not because of anything they built.

The advice for this stage: make sure the person looking at you understands what you are building and why it matters, whether that happens through your deck or in conversation. What you do, where you are, what you are raising and at what stage should be findable in thirty seconds. Decks that hide these are not being mysterious. They are being filtered out.

Stage two: the first call

Your first call is generally with one representative of the fund. If there are two people on it, there is usually a practical reason. The investor who spotted you may have brought along a colleague who knows your industry at a deeper level, or a junior investor may have brought an associate or even a partner to a call they have flagged as potentially high value. These are internal practicalities, largely invisible from your side, and they vary between funds.

What matters more is this: VC is a career that rewards autonomy, and the first person you speak with likely needs to become your advocate inside the fund. In most cases they will stay on your deal until the end of the evaluation, and they are your most valuable internal supporter. They cannot say yes on that call. What they are deciding is whether to spend their internal credibility on you.

The advice carries over from stage one, with a sharper aim: you are no longer just being understood, you are building towards having an internal advocate. Give them ammunition rather than enthusiasm. Clear numbers, honest gaps, and answers they can repeat internally without getting caught out.

Stage three: the internal case, and your data

If the call goes well, you get compressed into an internal case. At many funds that is a short memo the deal team writes and defends to colleagues who have never met you. Others run it differently, some host short pitch sessions where promising founders present to the whole team. Either way, the pattern is the same: people you have never spoken to are now forming a view of you through someone else’s framing.

This stage is also where the requests for additional material start, most often a financial model, the sales pipeline, and product documentation. It can be good practice to share this in chunks rather than instantly granting access to everything, keeping the investor engaged and coming back for more. My personal favourite is splitting the data room in two: a light version as the first step when materials are requested, and the full version once the process deepens. Given the volume of deals investors evaluate, attention spans can be short, and it makes sense to adjust your approach accordingly. Some funds will ask for the full data room from the start, and that is fine too.

The advice for this stage: get an understanding of the concerns and questions the wider fund team is raising with your deal team. Then support your deal team in finding clarity, and provide additional resources where needed. Every question they can answer crisply internally strengthens your case in a room you are not in.

Stage four: the committee, the term sheet, and the limbo

Most commonly this stage centres on a term sheet mandate session. The deal team, assuming they believe in your vision, seeks to convince the investment committee that the investment is worthwhile and that a term sheet is the next logical step. After that comes the deeper diligence: legal, technical, tax, commercial, and for impact funds the impact assessment. Functionally similar across funds, though they differ on how much of it they run themselves and how much they outsource.

One thing to expect: the fund will likely not be explicit about whether an upcoming committee session is intended as a term sheet mandate attempt. There is a natural incentive not to overpromise when timelines can shift and internal expectations differ. Read vagueness here as normal process behaviour, not as cooling interest.

The advice for this stage: you may end up sitting in limbo for a moment, and a quick check-in, a text message, or a material update can go a long way. The materials you share now become more and more specific, and frankly, all the more important. Once the deal team has the mandate to submit a term sheet, the next stage begins, with its own opportunities and risks. More on that in a subsequent post.

One habit that helps at every stage

Ask every investor where you are in their process and what the next internal step is. It is a completely normal question, investors answer it readily, and the answer tells you whether you are in a live process or a polite one. Run conversations in parallel, because any single fund’s funnel is slow and leaky, and your leverage comes from movement elsewhere. And when a no arrives, ask what kind of no it was, because many of them have nothing to do with your product at all.

About the author

Daniel Uusitalo is a Finnish venture capital investor backing early-stage, digital-first and impact-focused companies across Europe, with an emphasis on the Nordics. He covers the Nordics at 4impact capital, a Netherlands-based impact VC, and was previously an investor at Helen Ventures, an early backer of Virta, Enspired, Gradyent and Voltfang, among others.