Author: Moses Capital & Lev Leviev

Translation: Deep Tide TechFlow

Deep Tide Introduction: Moses Capital is a fund of funds focused on early-stage VC, having reviewed over 2000 funds within two years, ultimately investing in only 46, with a success rate of 2.3%. This article revisits the four major archetypes of GPs they identified during the selection process, the specific reasons behind the 97% rejection rate, and an unexpectedly effective due diligence method that has become the highest quality source of deal flow. This piece is densely packed with information for readers interested in the VC ecosystem and LP perspectives.

When I founded Moses Capital, I thought I had a general understanding of the emerging fund manager market. Hundreds of funds, concentrated in a few common cities, and as long as you knew where to look, you could find them.

This assumption lasted about three months.

In the past two years, we've reviewed over 2000 funds for Fund I. We conducted 553 initial communication calls and completed 276 full due diligence processes, ultimately adding 46 funds to our portfolio—resulting in a success rate of 2.3%. After sitting through so many conversations, patterns naturally emerge.

Here’s what we learned.

This market is bigger than anyone thinks

Before we built a systematic sourcing mechanism, our deal flow was like that of most fund of funds: reliant on networks and inbound leads. VCs recommend VCs. This logic works, but it also means your vision is constrained by ‘who knows you.’

When we began to capture SEC filing data in real time, the picture changed completely. Dozens of new funds are formed 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 had coverage of about 95% of US VC funds. The sheer number of new funds surprised even us.

The key is: most of these funds are invisible to most LPs. Not because they are lacking, but because they are too early, too small, and have not yet built the type of network that can get them on your shortlist. This is exactly the gap we intend to fill.

The four archetypes of GPs

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

1. Entrepreneurs turned investors

Former founders or senior operational executives, usually with a standout exit experience, who decide to start a fund. They have credibility among founders and possess strong deal flow in their specific subsectors. The challenge is that managing a fund and managing a company are completely different tasks—portfolio construction, follow-on investment strategies, post-investment management—many are learning as they go. Some adapt quickly, while more find their footing only by Fund II or Fund III.

1. Departed from VC firms

Former partners or principals from established funds (first-tier or second-tier) who venture out on their own. They have brand recognition, demonstrable performance, and usually have strong networks. We focus on assessing how much of their performance is truly theirs and how much is attributable to the platform. Once they leave the big fund, do they still remain competitive with founders?

1. Community-native managers

A type that has noticeably increased since 2020—managers who gain reputation by building communities, writing articles, podcasting, and managing social media. They have inbound deal flow, visibility, and often possess a true community moat.

This category can actually be divided into two types: one where investors establish the community, using it to drive deal flow and create network value for portfolio companies; the other where community operators naturally have deal flow, leading them to start investing. The distinction between these two is important. For both types, we look at two factors—how robust their investment discipline is and whether the community can create real value for the founders they want to back.

1. Quiet technical geeks

This is typically my personal favorite type. GPs with deep technical or industry expertise in a specific field, who have spent years honing their craft. They are the ones founders turn to when facing problems, and over time, more and more founders want them on their cap table from day one—not for branding, but to genuinely help build the business from the start.

This type tends to remain low-key, with their reputation built on expertise and long-standing relationships. They hardly ever reach out to us directly. We find them through systematic external searches, or more commonly, through founder references while conducting due diligence on other funds. We ask every founder: who on your cap table has helped you the most? The answers usually point to these types of individuals.

What does 97% rejection look like

We have rejected over 97% of the funds we reviewed. Every pass decision is made with the same caution as an investment decision, with this process being refined through the review of each fund.

• About 30% of rejections relate to the GP or the team. Insufficient operational experience, lack of clear differentiation from existing players, or networks that don’t translate into unique deal sourcing capabilities.
• About 25% fail at portfolio construction. Having too much exposure later, lack of discipline in follow-on investment strategies, insufficient ownership targets, or excessive diversification—which mathematically kills the potential for power-law returns. If a fund design is not intended to create concentrated big winners, it likely won’t.
• About 20% pertain to performance record issues. Investment history is too weak or insufficient, or performance does not match the current strategy (different regions, sectors, stages, check sizes).
• About 15% are due to strategy misalignment. The current strategy of the fund does not align with our investment themes, unrelated to performance—fund size too large, investment scope too broad, or involving areas and regions we intentionally avoid.
• The remaining 10% can be attributed to factors such as fundraising dynamics. If a manager cannot raise funds, they cannot execute their strategy.

The best sourcing channel we never planned

Our sourcing has evolved in stages. Initially relying on networks and inbound leads. Then we built a systematic outbound engine, capturing every newly established fund in the US in real time, filtering by size, strategy, and GP background. At its peak, this channel contributed to 70% of our meeting volume. We were able to engage with managers before most LPs even knew the fund existed.

However, the sourcing channel that ultimately proved to be the most valuable was not one we designed. It came from our due diligence process itself.

We perform blind founder reference calls for every GP and, if performance records allow, sometimes do as many as 10. In these calls, we don’t just ask about the manager we’re evaluating. We open the cap tables, going through other investors one by one, asking the founders for honest feedback on their early investors. The names that come up repeatedly become our targets for the next round of proactive outreach.

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

Building reputation

The reputation of Moses Capital initially spread through our investments and the relationships built around those investments. Now we receive a good number of proactive contacts from GPs who heard about us through the VC ecosystem. We strive to be worthy of this trust.

We are not anchor LPs, we don't sit on LPACs, and our checks are not large. But we do our homework. Before communicating with a GP, we usually track them for a period—monitoring their online activities, doing references, forming our judgments. The questions we ask are well-prepared. We understand how fund economics operate. We don’t disturb managers unnecessarily. If a fund is not suitable for us, we say so directly and explain why.

Managers appreciate this and thus recommend other managers to come to us.

What we learned after two years

Two years, 2000 funds. We have gained 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. It is a continuous learning process, reliant on our ability to see a sufficiently wide funnel and our constantly improving dynamic sourcing mechanism.