What kind of VC can get funding from a fund-of-funds? After reviewing 2,000 of them, we have the answer.

Author: Moses Capital & Lev Leviev

Translation: Deep潮 TechFlow

Deep潮 Guide: Moses Capital is a fund of funds focusing on early-stage VC. In two years, they reviewed more than 2,000 funds and ultimately invested in only 46, for a 2.3% approval rate. This article revisits the four main GP archetypes they found during the screening process, the specific reasons 97% of funds were eliminated, and a due diligence method that unexpectedly became the highest-quality source of deal flow. For readers interested in the VC ecosystem and from an LP perspective, the information density is very high.

When I founded Moses Capital, I thought I had a rough understanding of the market for emerging fund managers. A few hundred funds, concentrated in just a handful of common cities—if you knew where to look, you could find them.

That assumption held for about three months.

Over the past two years, we reviewed more than 2,000 funds for Fund I. We conducted 553 initial outreach calls, completed 276 full due diligence processes, and ultimately added 46 funds to the portfolio—an approval rate of 2.3%. After sitting down and going through that many conversations, patterns naturally start to show up.

Here’s what we learned.

This market is bigger than anyone thinks

Before we built a systematic sourcing system, our deal flow was the same as most fund of funds: relying on networks and inbound. VC recommends VC. This logic works, but it also means your perspective is constrained by the question of “who knows you.”

When we started capturing SEC filing data in real time, the picture changed completely. Every week, dozens of new funds are formed, and many of them don’t show up on anyone’s radar until months later—by then, they are already fundraising. By 2025, we covered about 95% of US VC funds. The sheer number of newly established funds surprised even us.

The key is: most of these funds are invisible to most LPs. Not because they are bad, but because they’re too early-stage, too small, and haven’t yet built the kind of relationship network that would get them onto a shortlist. That’s the gap we’re trying to fill.

Four archetypes of GPs

After 553 initial conversations, patterns began to emerge. We broadly categorize the managers we encounter into four types:

Founder-turned-investors

Former founders or former operating executives, usually with one relatively standout exit experience, and then they decide to start a fund. They have credibility among founders, and in their niche, the deal flow really is strong. The challenge is that managing a fund and running a company are completely different things—portfolio construction, follow-on investing strategy, and post-investment management. Many people are effectively learning on the job. Some get up to speed quickly, while more people only truly come into their own in Fund II or Fund III.

VC institution alumni who went independent

Former partners or Principals from established funds (tier one or tier two) who break out on their own. They have the halo of brand recognition, track records they can showcase, and usually strong networks as well. What we mainly look at is: how much of their performance is truly theirs, and how much belongs to the platform? After leaving a large fund, do they still have competitiveness with founders?

Community-native managers

A type that increased noticeably after 2020—managers who build reputation by creating communities, writing articles, running podcasts, and operating social media accounts. They have inbound deal flow, visibility, and typically a real community “moat.”

Within this category, there are actually two subtypes: one is that investors first build a community, using it to drive deal flow and create network value for the companies they invest in; the other is that community operators start investing because deal flow is naturally right there. The distinction matters. For both of these, we look at two things—how strong the investment discipline itself is, and whether the community can create real value for the founders they want to back.

Quiet technical geeks

This is usually my personal favorite type. GPs with deep technical or industry expertise in a specific domain, developed over many years of focused immersion. They are the people founders go to when they face problems. Over time, more and more founders want them to appear on the shareholder list early—not for branding, but so they can help build the business from day one.

People in this group intentionally stay low-profile. Their reputation is built on professional knowledge and relationships accumulated day by day. They almost never proactively reach out to us. We find them through systematic external search, or more commonly—during due diligence on other funds—through founder references. We ask every founder: among your shareholder roster, whose help has been the greatest? The answer is usually these people.

What does a 97% elimination look like?

We rejected more than 97% of the funds we reviewed. Each pass/fail decision is as careful as an investment decision, and the process is continually refined through the review of each fund.

About 30% of the eliminations relate to the GP or the team. Not enough fund operations experience, lack of clear differentiation from existing players, or a network that can’t be converted into a distinctive ability to source deals.

About 25% fail due to portfolio construction issues. Too much exposure in later stages, lack of discipline in follow-on strategies, target ownership ratios not strong enough, or over-diversification—which mathematically destroys the possibility of power-law returns. If a fund is not designed to generate a few concentrated big winners, it probably won’t.

About 20% are due to performance record problems. Investment history that’s too weak or insufficient, or performance that doesn’t match the current strategy (region, sector, stage, and check size all differ).

About 15% are strategy mismatches. The fund’s current strategy doesn’t match our investment themes—unrelated to performance. For example, the fund size is too large, the investment scope is too broad, or it involves domains and regions that we deliberately avoid.

The remaining 10% comes down to factors such as fundraising dynamics. If a manager can’t raise money, they can’t execute the strategy.

The best sourcing channel we never planned for

Our sourcing evolved in phases. At first, it relied on networks and inbound. Then we built a systematic outbound engine that captures every new US fund in real time, automatically filtering them by scale, strategy, and GP background. At its peak, this channel accounted for 70% of our meeting volume. We could get in touch with managers before most LPs even knew the funds existed.

But in the end, the sourcing channel that proved to deliver the highest value wasn’t something we designed. It came from our own due diligence process itself.

For each GP, we run blind founder reference calls. If the performance record allows it, sometimes we do up to 10 calls. In these conversations, we don’t just ask about the manager we’re evaluating. We open up the shareholder list and go through each other investor one by one, asking the founders to provide real feedback on their early investors. Names that come up repeatedly become our targets for proactive outreach in the next round.

This has proven to be our highest-quality source of deal flow.

Building a reputation

Moses Capital’s reputation initially began spreading through our investments and the relationships built around these investments. Now we receive a number of proactive inquiries from GPs who have heard of us through the VC ecosystem. We do our best to live up to that trust.

We are not anchor LPs, we don’t sit on the LPAC, and our checks aren’t large. But we do our homework. Before talking with a GP, we usually have been tracking them for a while—watching their online activity, doing references, and forming our own judgment. The questions we ask are prepared. We understand how fund economics work. We don’t disturb managers when it’s unnecessary. If a fund isn’t a fit for us, we’ll say so directly and explain why.

The managers really appreciate this, and as a result, they recommend other managers to come find us.

What we learned over two years

Two years, 2,000 funds. We gained a deeper understanding of this market and the people behind it. Every type of manager has the right to win—the key is that you know what to look for. This is a process of continuous learning, relying on our ability to see a sufficiently wide funnel and our constantly improving dynamic sourcing mechanism.