How VC Scouting Works
Hey there, fellow startup enthusiasts and future dealmakers!
If you’ve ever wondered how venture capital firms find the next big thing before everyone else, the answer often lies in VC scouts — the unsung heroes of early-stage investing.
At Transvaal VC, a micro-VC focused on energy and mining tech in South Africa, we rely heavily on scouts to uncover hidden gems in tough industries. Over the years, I’ve worked with dozens of scouts, from ex-founders to industry insiders, and I’ve seen firsthand how a strong scout network can make or break a VC’s pipeline.
So, let’s break it down: What exactly is a VC scout, how do they get paid, and how can you become one?
Venture Capital Image
What Is a VC Scout? (And Why Should You Care?)
A VC scout is like a talent scout for startups — someone with a sharp eye for early-stage companies that could become the next big success. They’re often operators, founders, or domain experts who have deep networks in specific industries (like fintech, SaaS, or, in our case, energy and mining).
What do they actually do?
✔ Source deals — Find promising startups before they hit the mainstream VC radar.
✔ Filter noise — Separate the real opportunities from the hype.
✔ Make warm intros — Connect founders to investors who can actually help them.
In competitive markets like Silicon Valley, scouts are everywhere. But in emerging ecosystems (like Africa or LatAm), a great scout can be a game-changer — helping VCs tap into deals they’d never find otherwise.
How Do VC Scouts Get Paid? (Spoiler: It’s Not Just Cash)
One of the most common questions I get: “How much can I make as a scout?”
The answer? It depends. But here’s how compensation usually works:
1. Per-Deal Fees (1K–1K–10K+ per referral)
You get paid when a startup you refer gets funded.
Common for one-off scouts or those just starting out.
2. Carry (1%–5% of the VC’s profits on your deals)
The real upside. If the startup exits, you get a slice of the returns.
Reserved for trusted scouts with a proven track record.
3. Hybrid Models (Fee + Carry)
The best of both worlds — some cash upfront, plus upside later.
This is what we use at Transvaal VC for our top scouts.
4. Retainers (For Full-Time Scouts)
Some elite scouts get a monthly stipend to keep their deal flow consistent.
Pro Tip: If you’re scouting for a top-tier firm (like Sequoia or a16z), carry is the golden ticket. But in smaller markets, cash fees are still common.
Famous VC Scouts & Scout Programs (Who’s Doing It Right?)
Some of the best investors in the world started as — or still rely on — scouts. Here are a few big names:
1. Sequoia Capital Scouts
One of the most established programs.
Scouts are often ex-founders or operators who refer deals in exchange for carry.
2. a16z’s Scout Program
Andreessen Horowitz uses scouts to tap into niche tech trends early.
3. Super Scouts (The Rockstars of Dealflow)
Elad Gil — Early scout for Airbnb, Coinbase, and more.
Li Jin — Known for spotting breakout consumer startups.
At Transvaal VC, we are building our own scout network across Africa’s energy and junior mining sector — because local expertise matters when evaluating mining licenses, projects or even solar and battery storage farms.
How to Become a VC Scout (Even If You’re Not in Silicon Valley)
Want in? Here’s how to get started:
1. Build Your Network
Hang out where founders do (startup events, accelerators, LinkedIn, Twitter).
In emerging markets, relationships matter even more.
2. Learn How VCs Think
Read Venture Deals by Brad Feld.
Follow VCs on Twitter (I recommend @eladgil, @pmarca).
You can also check out this website — www.superscout.co which provides invaluable information on all things VC scouting.
3. Use the Right Tools
Crunchbase & PitchBook for startup research.
AngelList for finding early-stage deals.
4. Join a Scout Program
Apply to formal programs (like Sequoia’s or On Deck’s ODX).
Or, reach out to smaller VCs (like us!) — many are open to scout partnerships.
The website — www.superscout.co provides information on several programs that you could find helpful on this topic.
Final Thought: Scouts Are the Future of VC
The best investors don’t just wait for deals to come to them — they build systems to find them first. And that’s exactly what scouts do.
At Transvaal VC, we wouldn’t have found some of our best leads and potentially leads without our scout network. If you’ve got a sharp eye for startups and a solid network, scouting could be your ticket into the VC world — or just a great side hustle with serious upside.
Want to chat more? Drop me a message — I’m always happy to talk shop with fellow deal hunters. 🚀
