1. Reform the warm intro system
The defense of warm intros is reasonable.
“Cold outreach is noise”
“Your network is your biggest asset”
Fine.
But what that system mostly filters for is familiarity with how VC works (perhaps unknowingly?)… not necessarily founder quality.
The materials scientist in a university lab who just figured out how to make batteries last 10x longer doesn't know what a warm intro is.
She's never been to a demo day.
She's not on Twitter.
She thinks "fundraising" means applying for an NIH grant.
She has no idea that the right coffee with the right associate at the right fund could change her trajectory.
Of course, to be clear, if someone you trust deeply tells you a founder is exceptional, listen to them!
The problem is when that's the ONLY door that exists.
And no, the fix is not an open inbox.
The fix is embedding people inside research universities, national labs, community colleges, and manufacturing hubs whose explicit job is to identify founders before they know they're founders.
AND introduce them to the language of VC before the language of VC becomes a barrier.
Last year, I worked with startups building around wildfire disaster response and let me tell you, the firefighters who had spent careers in 110°F heat, making life or death calls with zero margin for error, did NOT want to talk to a Silicon Valley VC in a Patagonia vest who'd never seen a fire line…
Meaning most VCs will never hear about their insane inventions: hose systems that cut water waste by half, firebreak designs that actually work at scale, new plant species that don't ignite…
Instead of networking or attending demo days, they’re building and talking to customers.
Which is exactly what we tell founders to do!
And then we make funding contingent on knowing the right people, speaking the right language, and showing up in the right rooms.
The best founders are often the ones least willing to stop what they're doing to play that game.
And we call it a pipeline problem…
2. Talk more about the quiet failures
The failure VC celebrates is the spectacular, high-profile, "we swung big and missed" kind.
Usually from someone who already had brand, network, and a second startup waiting.
The failure that gets reframed as boldness, written up in Forbes, and turned into a keynote at a conference.
The failure most founders experience is quieter: ran out of runway at $3M ARR, couldn't close the Series A, wound down with dignity, returned what was left…
That founder learned more than almost anyone in your portfolio!
She navigated a hard pivot, managed a team through uncertainty, and made the call to shut down before she ran out of options.
The fix here isn't complicated: during DD, instead of asking "did she succeed?", ask "how did she handle the moment it stopped working?"
Respect second-time founders who can articulate exactly what they learned.
Some of the best investments available right now are sitting in that pool.
But they're not pitching you because they assume you'll pass.
3. Retire “the market is too small”. Replace it with “help me understand the demand”.
Market sizing is not a neutral exercise.
It is an act of imagination, and imagination is constrained by experience.
The VC who has never thought about menopause, never needed childcare infrastructure, never experienced a chronic pain condition that took seven years to diagnose… that VC is going to undersize every market built around those experiences.
Not out of malice.
Out of a genuine inability to feel the demand.
When you've never been the customer, you can't intuit the suppressed demand that exists because the product never existed.
The classic error: looking at current spend in a category and calling it the market.
But in categories where women, or non-dominant groups, or underserved geographies are the customer, current spend dramatically understates latent demand.
This is how FemTech went from "niche" to an $40B+ category.
This is how the care economy went from "not venture-scale" to a multi-trillion dollar crisis that governments are scrambling to address.
It also helps to have a partner in the room who has been the customer (or at least is willing to get to know the customer).
4. Treat board seats like what they are: the most consequential thing in the term sheet.
A board seat comes with voting rights, information rights, and the legal ability to replace a CEO.
That is enormous structural power over someone's company and it gets handed out in term sheets like it's administrative.
For a first-time founder who has never sat in a boardroom, who is now outnumbered at her own table, who is legally accountable to people with more institutional leverage than her, this is not a formality.
The mechanics of governance, what triggers a board vote, what "founder-friendly" actually means when things go sideways… these conversations should happen before the signature!
Not after the first difficult quarter when everyone is suddenly reading the fine print…
The fix has two parts.
First: normalize pre-term-sheet governance conversations
What does this investor actually do when a company hits a rough patch?
What decisions require board approval?
What does "we back the founder" mean operationally when the board disagrees with her?
Second: if you're an investor, be honest about what your board involvement ACTUALLY looks like.
"We're value-add partners" is easy to say and hard to verify…
5. Scout programs are great. Unpaid scout programs are volunteering programs…
The whole point of scouts is to reach founders in communities VCs don't naturally access.
But if your scout program requires someone to work for free (or for carry that vests in a decade) your scouts are people who can afford to work for free.
Which means your "diverse pipeline strategy" is structurally dependent on people with financial cushions.
A $200M fund charging 2% management fees generates $4M a year in fees.
3 full-time, well-paid scouts costs, let’s say, $300-400K annually.
That's less than 10% of your fee income, and it fundamentally changes whose deals you see.
6. The LP base is where most of what's broken starts!
Every downstream problem in VC (who gets funded, what return profile gets optimized for, which GPs get backing) flows from who the LPs are and what they want.
And most institutional LP capital comes from endowments, pension funds, and family offices with long relationships with existing managers, strong incentives to back familiar names, and mandates that penalize deviation from the benchmark.
The result: a GP who wants to run a genuinely differentiated strategy runs into LP pressure at every turn. Not because LPs are malicious.
Because their own incentive structures reward consistency over innovation.
The pension fund manager who backs an unconventional GP and underperforms has a career problem.
The one who backs the same established fund and underperforms has a market problem.
This is why emerging manager programs matter for portfolio diversification.
Changing who gets funded means changing who funds the funds.
What changes would you add to this list?
What changes do you disagree with?