In 2024, global venture capital firms hit $368 billion in investments, according to KPMG’s Venture Pulse report. On paper, it looks like a golden era. 1
But behind the scenes, investors are overwhelmed, decision-making is fragmented, and founders are navigating an opaque system built for a different era.
Scaling in dollars but not in design.
Between 2015 and 2023, the number of active funds managed by Venture Capital Firms grew by 76%, based on Private Equity Wire’s 2025 Deal Sourcing Guide2. That should have broadened access and improved sourcing. Instead, it has created more noise, especially at the top of the funnel.
Inboxes are flooded. Deal flow pours in via scout programs, demo days, cold emails, LinkedIn DMs, and curated newsletters. Yet despite all this activity, sourcing remains anchored to warm intros. This method favors those with insider networks and systematically filters out talent without them.
The cost is massive. India alone has over 455,000 startups, yet only a fraction ever make it into mainstream VC visibility 3.
The Deal Volume Is Real, but So Is the Bandwidth Problem
Back in 2015, Andreessen Horowitz, a well-known venture capital firm, reviewed 3,000 startups annually, investing in just 2% of the “hot” deals 4. Fast forward to 2024, and the dynamic has not changed much. The issue is not a lack of opportunity, it is a lack of bandwidth.
Pitch decks pile up faster than they can be read. Calls happen, follow-ups stall. Pipelines sit buried in spreadsheets. There is no clarity on ownership, status, or next steps. Promising startups slip through the cracks not because they are weak but because the system is not built to handle scale with structure.
Feedback loops are almost nonexistent. This is not out of malice but because time is scarce, liability is real, and workflows are broken. Founders are left guessing. Relationships stall in silence. Trust erodes.
The Real Bottleneck Is Not Sourcing, It’s Synthesis
Modern due diligence spans customer traction, founder history, product usage, NPS scores, Reddit threads, Glassdoor reviews, Discord chatter. But there is no unified system to manage it. One VC associate summed it up: “It’s like triangulating truth through 20 browser tabs and a spreadsheet.”
This fragmentation clouds judgment. It slows conviction. It leaves founders ghosted after third calls and investors second-guessing instead of closing. The friction is not upstream, it is in the core decision-making layer.
The AI Paradox: Investing in It But Are They Operating With It
In Q4 2024, AI companies raised $32.2 billion in the U.S., accounting for 43% of all startup funding that quarter 5. Venture Capital Firms are making bold bets on AI while still running their own workflows on spreadsheets and siloed tools.
There are outliers. NGP Capital hired a data scientist in 2019 and by 2020 was scanning 2 million private companies against its investment thesis. This became a proprietary analytics engine for deal flow 6. The trend is catching on. Between May 2023 and May 2024, there was a 26% rise in data-driven Venture Capital Firms, and 94% of investors reported plans to integrate AI into their deal flow this year 7.
Even among adopters, tools remain disconnected. Affinity maps networks. Harmonic scans companies. PitchBook surfaces sector trends. None of it flows through one cohesive system. .
Enter InvestorBase
InvestorBase tackles this by re-architecting the workflow for Venture Capital Firms. It consolidates fragmented inbound from emails, forms, and DMs and connects it to thesis-driven filters, live market signals, and internal firm knowledge. Not as a point tool but as infrastructure, a platform that builds context as it captures data.
This structural shift enables earlier pattern recognition, deeper diligence, and faster prioritization. Venture Capital Firms do not just automate. They build sustained conviction across deals and teams.
The Signal Is Human. AI Only Organizes the Noise.
AI can surface correlations but not always context. It can cluster sentiment but often misses nuance. As Venture Capital Firms train on overlapping data sets, they risk signal convergence where everyone ends up chasing the same company types for the same reasons.
Conviction does not come from a dashboard. It is still forged in conversation, observation, and intuition. The human element matters more than ever.
That is the tension and the opportunity. The goal is not to replace the craft. It is to protect it by stripping away friction and giving investors the space to ask better questions, challenge assumptions, and move with clarity.
AI will not close your next deal but it might help you see the right one.
References
KPMG (2025, January). 2024 Global VC investment rises to $368 billion. Read article
Private Equity Wire (2025). Deal sourcing guide for venture capital 2025: Best practices for today’s market. Read article
Tracxn (2025, April). Explore 455K+ companies in India. See website
TechCrunch Disrupt (2024). Fireside Chat with Sam Altman, OpenAI – Disrupt SF 2024. Watch video
KPMG (2025, January). 2024 Global VC investment rises to $368 billion. Read article
Kim Moore (2024, July). AI tools are transforming VC investment — but CVCs are behind the curve. Read article
Data-Driven VC (2024). Landscape 2024: Mapping the emerging data-driven VC ecosystem. Explore report