The VC Funnel: 100 Reviewed, 2 Funded — Which Stage Are You Getting Cut At?

#100 Reviewed → 2 Funded: the Full Funnel

In his book, Lee Taek-kyung of Mashup Angels shares a year's worth of actual funnel data from a hypothetical firm he calls "Firm B." There are six decision-making stages, and the reasons founders wash out differ at each one.

#Stage 1, First Meeting — 60 Deals Lost to Formatting and a Fuzzy One-Line Pitch

60 of every 100 deals end at the decision not to take a second meeting. Modeled on the Lee Taek-kyung persona, here are the most common reasons.

• Materials sent as HWP or DOC — never even opened (PDF is the standard)
• No team introduction — Lee's own phrase for this is a Korean expression for "a bun with no filling" (Ch. 4)
• Can't convey the core business model in under a minute — heavy on abstract buzzwords
• No stated funding amount or timing — makes stage-matching impossible from the start
• Blanket cold emails sent to investors whose stage or sector focus doesn't match
• Wrong investor's name left in the body of a cold email

#Stage 2, Follow-Up Meeting — 25 Deals Lost to Weak Pain Point Validation

Of the 40 deals that pass the first meeting, 25 either never get a follow-up scheduled or stall out after one is. This is where deals land when the first meeting went well but ended on a "let's keep watching" note.

#Stage 3, IR Pitch — 7 Deals Lost to Deck-Writing Mistakes

Of the 15 deals invited to pitch, 7 wash out because of the IR deck itself. The direct cause is usually one of the frequently-broken rules from Lee's eight IR-deck writing tips (Ch. 5).

1. All "what," no "how" — states the goal with no step-by-step strategy behind it
2. Abstract buzzwords like "world's best" or "unrivaled" with no evidence behind them
3. Claims to beat competitors on every single dimension — ignoring that trade-offs exist
4. Over-emphasizes outside advisors — masking a weak full-time team
5. Avoids mentioning profitability at all
6. No mention of a path to exit (IPO or M&A)

#Stages 4–6, IC and Due Diligence — 5 Deals Lost to Failed Verification

Of the 8 deals that clear the preliminary IC, only 3 make it through the final IC. Washouts in this range aren't about the IR deck anymore — they're mostly about "the numbers don't add up" or "legal and financial housekeeping isn't done."

#Reverse-Engineering Your Stage From the Tone of the Rejection

No VC will spell out "you got cut at stage 3." You have to reverse-engineer it from the tone of the rejection. This is exactly why Lee's book includes the line "an investor who rejects you quickly is doing you a favor" — read the tone correctly, and it becomes usable information for your next attempt.

#What to Fix First at Each Stage

Once you see a pattern in which stage you're getting cut at, the priority order sets itself. Try to fix every stage at once, and you'll end up fixing none of them.

1. Repeatedly cut at ① → fix formatting, your one-line pitch, and team intro — doable within a week
2. Repeatedly cut at ② → build MVP, payment, and interview data — takes 3–6 months
3. Repeatedly cut at ③ → run through the 8 IR-deck writing tips — a 2-week fix
4. Repeatedly cut at ④ → prepare supplementary material to win over other partners, and change your point of contact
5. Repeatedly cut at ⑤ → clean up finance and legal through an accountant and lawyer — 4–8 weeks
6. Repeatedly cut at ⑥ → rethink your valuation negotiation tone (pride vs. treating valuation as a waypoint, not a destination)