The two front lines of startup sourcing

For decades, venture capital firms relied on junior investors — analysts, associates, principals — to surface early-stage deals. These full-time roles come with well-known tradeoffs: associates work long hours screening hundreds of companies, but rarely get to write checks independently.

Meanwhile, scout programs have emerged as a parallel pipeline. Instead of paying salaries, firms allocate small pools of capital to trusted operators and founders. These scouts place small bets, often with full discretion. If the company becomes a breakout, both the scout and the VC share in the upside.

It raises an obvious question: who’s actually better at finding the next big thing?

Associates: structured, thorough, but often outside the circle

Associates typically sit in an office reviewing pitch decks, tracking market trends, or building sourcing funnels on LinkedIn. They might make dozens of founder calls each week. It’s disciplined, thorough, and crucial for building a fund’s pipeline.

But there’s a catch. Founders raising pre-seed rounds often don’t start by calling an associate. They reach out to peers — other founders, angel investors, respected operators in their field. By the time a startup hits a VC inbox, it’s frequently been pre-vetted by informal networks.

As Fred Wilson once put it, “The best VC investments we’ve ever made came through our network, often from angels or founders we already knew.”

Associates can absolutely build relationships and trust over time. Many eventually become principals or partners. But early on, they often lack the deep founder relationships that scouts typically bring.

Scouts: embedded, trusted, and invited earlier

Scouts flip this model on its head. A typical scout is already embedded in the ecosystem as a founder, engineer, product lead, or active angel. Their networks are organic, not built around a venture job. That means when someone starts a company, the scout is often one of the first to hear.

Take Matt MacInnis, who backed Notion and Clever as a Sequoia scout. Or Clara Shih, who describes how female founders would approach her informally long before seeking a formal VC round. Or Jason Calacanis, whose early Uber investment was done on a hunch from founder conversations, not spreadsheets.

This closeness matters. As Jeremy Liew at Lightspeed said, “Scout programs allow us to get companies on our radar early and widen our aperture.” They pull startups into the VC orbit that might otherwise stay hidden.

The power of peer credibility

Scouts also hold a powerful advantage that associates can’t easily replicate: peer credibility.

A founder is far more likely to take a coffee with another founder they respect — or someone who’s shipped a product at a hot startup — than with a 24-year-old associate who’s only been in venture. That doesn’t mean associates lack judgment or hustle. It’s simply a matter of lived experience and perceived empathy. Founders want advice from people who’ve been in the trenches.

This dynamic is why many scout checks happen before a formal deck even exists. They’re often the first money in, on reputation alone.

So why do firms still hire associates?

Given all this, it might sound like scouts are categorically better at finding breakout startups. But that’s not quite true. Associates bring a scale and structure that scouts simply can’t.

Associates can track 300+ startups a year, run systematic outreach, map entire market landscapes, and spot thematic trends that an individual scout might overlook. They’re trained to dig into TAM, customer acquisition, cohort data — and back it up in memos. That discipline ensures the firm doesn’t just chase shiny objects.

Plus, associates are internal. They’re steeped in the firm’s thesis, know exactly what the partners are likely to fund, and can champion deals through multiple meetings. A scout might see dozens of great companies, but only a few will fit the mothership’s mandate.

The reality: firms hedge with both

In practice, the best VC firms run a portfolio of sourcing approaches. They use scouts to catch companies in the messy, pre-pitch phase — and associates to run disciplined pipelines and diligence.

Sequoia, for instance, built one of the largest scout networks precisely to complement its internal team. Andreessen Horowitz did the same in Europe, layering dozens of informal scouts atop a growing analyst bench.

In fact, some funds view scouts as the best farm team for future associates. A scout with a strong track record might later join the firm full time, bringing both the pattern recognition and the war stories of writing their own checks.

The takeaway

So who’s better at finding the next big thing — the scout or the associate? The honest answer: they’re designed to be different tools. Scouts excel at catching companies early, based on personal trust. Associates scale systematic search and ensure diligence rigor.

That’s why most modern firms wouldn’t pick one over the other. They hedge by using both — leveraging scouts to broaden the funnel and associates to tighten the filter. It’s a symbiotic setup that quietly powers some of the best portfolios in venture.

‍