Microsoft Ventures head Mukund Mohan has posted some extracts from an US academic paper on " How Do Venture Capitalists Make Decisions? ". Some highlights: VC-backed Cos Dominate the IPO Scene Roughly one-half of all true IPOs are VC-backed even though fewer than one quarter of 1% of companies receive venture financing 10% of VC investments are made w/o any introductions! Over 30% of investments are generated through professional networks. Another 20% are referred by other investors and 8% from a portfolio company. Almost 30% are proactively self-generated. Only 10% come inbound from company management. VCs invest in 2.5% of the companies they consider. The median firm closes about 4 deals per year. For each deal in which a VC firm eventually invests or closes, the firm considers roughly 151+ potential opportunities VCs want 5x return on their investments. The average required IRR is 31%. Late-stage and larger VCs require lo...