How to pass Senovo’s Initial Screening Stage

Alexander Buchberger
Published in
3 min readSep 26, 2017


During the last 5 years, we invested into 19 start-up companies. All these firms passed our first screening process after their pitch deck was submitted to us. We are often asked by founders, why they were rejected immediately after sending an email to us. This is why we conducted an analysis of our deal flow in order to see why some ventures pass the first screening stage and why some others don’t. Of course, the results are based on our data only and do not imply any generalization for other venture capital firms. We found several interesting implications for start-up companies seeking venture capital with Senovo.

The most important advice we can give is that entrepreneurs should take the time to inform themselves about the investment focus and the current portfolio of a venture capital firm before approaching it. This reduces the effort on both sides. Even though this suggestion seems quite obvious, we observed that more than 70% of the companies approaching us were directly rejected during the screening stage because they did not fit our minimum investment criteria (above all because they were too early stage and/or had no B2B industry focus). In addition, some ventures were direct competitors to one of our portfolio companies. So, if a company fits the firm’s investment sweet spot, its chances to pass the screening and call/meeting stage increase considerably. This finding further underlines the benefits of approaching venture capital firms that focus on investing in the sector, geography and stage of the proposing company.

Moreover, we analyzed resubmission of pitch decks during subsequent financing rounds. Our findings indicate that entrepreneurs should not shy away from resubmitting their idea to a venture capital firm after rejection, if the VC encouraged them to do so. Even though a firm might not fit a fund’s portfolio initially, it is not out of question that the company might be selected at a later point in time. In fact, the investment rate for proposals that were submitted to us for the second or third time was significantly higher than for first-time submissions in the past couple of years.

The results of our analysis also show that entrepreneurs should by any means seek to get an introduction to us through their network, as this has a strong positive effect on the decision to let a deal pass the screening stage. Considering the fact that the majority of all deals are typically rejected during this first stage of a VC’s selection process, it seems to be crucial to catch our interest (or another VC’s) early on in the process. The importance of a trusted referral is further underlined by the fact that 17 out of the 19 investments done by us were sourced from our network, while we did not select any company that sent its proposal to us without any personal introduction. I don’t want to generalize this fact or demotivate founders to send us their pitch deck not knowing us personally– nevertheless your chances will be much higher if you can convince someone acquainted to us to make an intro.

Furthermore, we analyzed soft facts which might influence our decision to further go into due diligence with a venture. Our findings suggest that quality signals such as patents and, in particular, an entrepreneur’s prior track record of success are likely to influence our deal evaluations. While the findings of prior academic studies indicate that those quality signals are actually associated with a venture’s overall success, we did not find a significant relation between the signals and the future outcome of the analyzed ventures. Hence, we have to stay as objective as possible when assessing a startup, even if certain signs of quality have caught our interest.

Last but not least, we studied the syndication of deals, i.e. having some fellow co-investors within our first financing round. We syndicate more than 90% of our investments into new companies. For start-ups having already found one or two committed investors, it is a decent signal to pass the first screening boundary of a VC. Even though prior academic studies found evidence that venture syndication is beneficial to the investment performance — both on a deal level as well as on a fund level — we should be aware that the involvement or interest of other investors in a deal is not always a reliable indicator for the quality of the venture. Thus, it is important that VCs improve their venture selection process by learning from the deal evaluations of other investors rather than relying on them blindly.