Deal Sourcing
Soon after I graduated from the University of Cincinnati in the summer of 2024, I was able to secure an externship through Extern where I got to help in deal sourcing for Energy Innovation Capital (EIC). This project was four weeks long and I was able to learn a lot in terms of market research, pitch-deck preparation, investment summaries, and skills on presentations.
In my case, I worked in the carbon capture and storage market where I defined market size and growth drivers, performed an analysis of the competitive environment and new players, and synthesized the risk and challenges. As part of an organized group, we prepared research notes, and were provided with drafts and rough notes from our colleagues who reviewed our work.
In the second week, we were assigned post-seed startups that had requested funding from the EIC. I had access to the startup's pitch decks, CBinsights, and Crunchbase among other available tools to carry out the due diligence with some degree of thoroughness. As part of the process, this included drafting the initial investment summary as the first step in deciding whether an investment should be made by the fund. The evaluation involved a conflict between quantitative – such as financial measures – and qualitative, for example strategic fit a startup offers to EIC’s investment thesis.
Illustration of the Carbon Capture, Utilization, and Storage (CCUS) Process.
Over the next several weeks, mentors and peers’ comments helped me revise my investment summary, which was further developed through training. This important phase was both exhausting and fulfilling, ending with the final demonstration in front of the EIC investment team.
My main takeaway from the project was the amount of qualitative research that goes into an investment decision at a venture capital firm. Most factors, such as the leadership of the founders, team breakdown, and the vision of the particular founders, were as pivotal to performance as the financial ones.
I appreciate this structured approach to training. My peers were impressive, with different career paths and countries, but connected by the same interest: all things sustainable, and funding innovative ideas. Interesting discussions with the investment team of EIC brought the day-to-day aspects of this line of work to my attention, which includes areas of my potential improvement. I understood that while I am comfortable with numbers, I have certain gaps concerning the basics of financial models and investment performances, these competencies I am now keen to build.
For the better part, this externship was an important step forward. It reinforced my interest in venture capital. More importantly, it has also shown me the things that I need to work on as I progress in this field.