Author: Moses Capital & Lev Leviev
Compiled by: Deep Tide TechFlow
Introduction: Moses Capital is a Fund of Funds (FoF) focused on early-stage VCs. Over the past two years, they have reviewed more than 2,000 funds and ultimately invested in only 46, with an approval rate of 2.3%. This article reviews the four archetypes of GPs they discovered during the screening process, the specific reasons for the 97% rejection rate, and an unexpected due diligence method that became the highest-quality source of deal flow. For readers interested in the VC ecosystem and the LP perspective, the information density is very high.
When I founded Moses Capital, I thought I had a general understanding of the market for emerging fund managers. A few hundred funds, concentrated in a few common cities, and all you needed to know was where to look.
That assumption lasted about three months.
Over the past two years, we have reviewed more than 2,000 funds for Fund I. We conducted 553 preliminary calls, completed 276 full due diligence processes, and ultimately added 46 funds to our portfolio—an approval rate of 2.3%. When you sit through that many conversations, patterns naturally emerge.
Here’s what we learned.
This Market Is Larger Than Anyone Thought
Before we built a systematic sourcing process, our deal flow was like most FoFs: relying on networks and inbound referrals. VCs refer other VCs. This approach works, but it also means your perspective is limited by "who knows you."
When we started scraping SEC filing data in real-time, the picture changed completely. Dozens of new funds are launched every week, many of which don’t appear on anyone’s radar until months later—by which time they are already fundraising. By 2025, we covered about 95% of U.S. VC funds. The sheer number of new funds surprised even us.
The key point: most of these funds are invisible to the majority of LPs. Not because they are bad, but because they are too early-stage, too small, and haven’t built the network that gets you on shortlists. This is precisely the gap we aim to fill.
Four Archetypes of GPs
After 553 preliminary calls, patterns began to emerge. We broadly categorized the managers we met into four types:
- Entrepreneurs Turned Investors
Former founders or former operating executives, usually with one notable exit, who then decide to start a fund. They have credibility among founders and strong deal flow in their niche. The challenge is that managing a fund and managing a company are two completely different things—portfolio construction, follow-on investment strategies, post-investment management—many learn on the job. Some pick it up quickly, but more only truly get it by Fund II or Fund III.
- VC Spin-Outs
Former partners or principals from established funds (tier-one or tier-two) who go out on their own. They have brand recognition, track records to show, and usually strong networks. What we primarily look at: how much of that track record is theirs, and how much is the platform’s? After leaving a large fund, do they still remain competitive among founders?
- Community-Native Managers
A type that has clearly increased since 2020—managers who have built their reputation through community building, writing articles, hosting podcasts, and managing social media. They have inbound deal flow, visibility, and usually a real community moat.
Within this category, there are actually two subtypes: one is investors who built a community first, using it to drive deal flow and create network value for portfolio companies; the other is community operators who started investing because deal flow naturally came to them. The distinction between these two is important. For both, we look at two things—the quality of their investment discipline, and whether the community creates real value for the founders they want to back.
- Quiet Technical Experts
This is usually my personal favorite type. The GP has deep technical or industry expertise in a specific field, honed over many years. They are the people founders turn to for advice when facing problems, and over time, more and more founders want them on their cap table early—not for the brand, but to help build the business from day one.
These individuals deliberately stay low-profile, building their reputation on expertise and accumulated relationships. They almost never reach out to us proactively. We find them through systematic external searches or, more commonly, through founder references during due diligence on other funds. We ask every founder: among your investors, who provided the most help? The answer is often this type of person.
What the 97% Rejection Looks Like
We rejected over 97% of the funds we reviewed. Each pass decision was made as carefully as an investment decision, and this process was refined with every fund we examined.
- About 30% of rejections were related to the GP or team. Insufficient fund management experience, lack of clear differentiation from existing players, or networks that don’t translate into unique deal sourcing capabilities.
- About 25% failed on portfolio construction. Too much exposure to later stages, lack of discipline in follow-on strategies, insufficient target ownership, or over-diversification—mathematically killing the possibility of power law returns. If a fund isn’t designed to generate concentrated big winners, it probably won’t.
- About 20% were due to track record issues. Investment history too weak or insufficient, or a track record that doesn’t match the current strategy (different geographies, sectors, stages, check sizes).
- About 15% were due to strategy mismatch. The fund’s current strategy doesn’t align with our investment themes, unrelated to performance—fund size too large, investment scope too broad, or involvement in areas or regions we deliberately avoid.
- The remaining 10% were due to factors like fundraising dynamics. If a manager can’t raise money, they can’t execute their strategy.
The Best Sourcing Channel We Never Planned
Our sourcing evolved in stages. Initially, it relied on networks and inbound referrals. Then we built a systematic outbound engine that scrapes every new U.S. fund in real-time, automatically filtering by size, strategy, and GP background. At its peak, this channel accounted for 70% of our meetings. We could reach managers before most LPs even knew the fund existed.
But the sourcing channel that ultimately proved most valuable wasn’t one we designed. It came from our due diligence process itself.
For every GP, we conduct blind founder reference calls—sometimes up to 10 if the track record allows. In these calls, we don’t just ask about the manager we’re evaluating. We go through the cap table, asking founders for honest feedback on their other early investors. The names that come up repeatedly become our next targets for outreach.
This proved to be our highest-quality source of deal flow.
Building a Reputation
Moses Capital’s reputation initially spread through our investments and the relationships built around them. Now we receive many proactive inquiries from GPs who heard about us through the VC ecosystem. We strive to be worthy of that trust.
We are not anchor LPs, we don’t sit on LPACs, and our checks aren’t large. But we do our homework. Before engaging with a GP, we usually have been tracking them for a while—monitoring their online presence, conducting references, and forming our own judgments. Our questions are prepared. We understand how fund economics work. We don’t disturb managers unnecessarily. If a fund isn’t right for us, we say so directly and explain why.
Managers appreciate this, and as a result, they refer other managers to us.
What We’ve Learned Over Two Years
Two years, 2,000 funds. We have a deeper understanding of this market and the people behind it. Every type of manager has the right to win—the key is knowing what to look for. This is an ongoing learning process, relying on our ability to see a broad enough funnel and our continuously improving dynamic sourcing mechanism.
