ITR #023: Don't build too curated of a VC list

Welcome to the latest edition of “Into the Ring”—my newsletter on how to successfully plan & execute on your startup fundraise. I’m Jorian Hoover—I work 1:1 with founders to run high-quality fundraises and have helped 50+ founders raise over $190M. If you’d like to work with me, you can learn more and apply to work with me here. And a warm welcome to the new subscribers for this edition! If you were forwarded this newsletter, you can subscribe here.

A bit of a personal update—I’m feeling more energized than ever after spending late September & early October in San Francisco. I spent time grabbing coffees and breakfast burritos (I’m looking at you, Cafe Reveille) with founders, VCs, and startup operators—many of whom I’m lucky to call my friends. The AI wave is palpable in SF with OpenAI and Anthropic rapidly expanding their offices, and billions of VC dollars going into new AI startups.

I often get asked, “Jorian, how’s the VC market doing right now?” and I often answer that it’s a bifurcated market. If you’re a founder or VC based in SF or NY, you’ll likely feel that today’s market is frothy and we’re in some kind of an AI bubble (whether we’re near the top or have lots of room to grow is a different question). But if you’re outside of these two markets, you’ll probably feel that the VC ecosystem seems normal, if not stagnant.

Peter Walker, head of insights at Carta, posted the following chart on LinkedIn earlier this week:

This chart confirmed what I had anecdotally seen over the past year. For the 2025 Series As that raised at a 90+ percentile valuation, a whopping 70% of them were based in SF or NY. Whereas for the 50-75th percentile, this dropped to 14%.

The tides have turned—SF (and NY) are regaining strength as THE startup cities, and talk of the Bay Area ceding its number one spot is officially dead (at least for now). If you’re a founder or VC in the US, there’s no better market to be in than one of these two cities.

Now on to today’s topic, which is about expanding the circle of which VCs might invest in you.

The dilemma: building a highly curated VC list

If you're raising from VCs, you’ll often hear an old adage: “only talk to the VCs who are focused on your space.”

When I meet many founders, they’ll show me their list of ~40 VCs who they’ve actively networked into and who are passionate about the space. A defense-focused founder may know all the VCs who tweet about finding the next Anduril or Palantir.

Here’s what can go wrong if the defense founder isn’t willing to broaden their list beyond these 40 highly curated VCs:

1. 40 defense VCs is not enough shots on goal. Many founders end up speaking with 50-100 (or more!) VCs before finding a lead investor.

2. These 40 highly curated VCs see every deal in the defense space. So they can be even more picky with which startups they invest in.

3. There are at least 100 more VCs who are interested in the defense space, and who could be a good fit, but you’re missing them.

50+% of founders are surprised at which VC invests in them

One of the benefits of my job is I come across dozens of founders each month who are raising VC funding. And time and time again, these founders are surprised at which VC ends up investing in them.

Back to our defense example (I wrote a LinkedIn post about this earlier this week):

• The founder had created a list of 40 defense-focused VCs they would talk with. They were confident they’d receive investment from one of these VCs. They had networked deeply with this community and had countless warm intros.

• They wanted to add several dozen additional VCs who would serve as practice and drive up competition for their deal. But essentially, these were filler VCs.

• Four weeks into their Series A process, only 5 of the 40 defense-focused VCs were still in the running. But 20 of the “practice VCs” were still moving forward and actively asking questions.

• The founder ended up receiving a Series A term sheet from one of their practice VCs, and the VC has proven to be a great partner.

While this founder was happy to receive funding, they were kicking themselves for how they had run their fundraising process. So much focus went into their 40 targeted defense-focused VCs that they hadn’t built relationships with the other VCs or taken them seriously.

You should build a broad AND curated VC list

To avoid the trap of the defense founder, you want to build a VC list that’s deep enough. As a rule of thumb, I often suggest creating a list of 125+ VCs that you can target as part of your process.

Step 1: I still want you to heavily curate the top of your VC list. Find which VCs (and if you can, which partners) are focused and actively investing in your space. Even better, find the partners who have operating experience specific to your industry. The best way to find these VCs is via other founders, X, lists focused on your space, etc.

Step 2: Go broad. Use resources like Crunchbase, VCSheet, NFX Signal, LLMs, etc. to find VCs who want to dip their toes into your space as well as generalist VCs. For each of these VCs, it’s great if you can research on their websites and on Perplexity to see if they’re a good fit.

Step 3 and beyond: Multiple steps here (which aren’t the focus of today’s newsletter) - tier your VCs based on how good of a fit and how strong they are, do your intro-mapping, and so on. If you have time on your side, you may even want to have coffee chats with VCs before you start raising.

Remember: If you have a robust enough (125+) list of VCs, and don’t treat the non-specialized VCs as practice, you’ll have a great list to work through for your fundraising process.

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