There are many more small companies trying to grow big than large and relatively established companies. As a result, venture capital (VC) investors who invest in small companies with the potential to grow big are seeing many more companies at any given time than private equity or public equity investors who invest primarily in large and relatively established companies.
However, there is a natural limit to how many companies you can evaluate in sufficient depth to develop an informed view on these companies at any one time. For me this is no more than 3 companies at any given time. For others it may be slightly less or slightly more. However, there is a limit.
In order to manage the large number of companies that you can potentially evaluate as a VC, you need to do two things.
First, you need to get comfortable with saying no very often. If there are clear red flags regarding an opportunity, dismissing it at the outset is necessary to save your time to evaluate those opportunities that you find more promising.
While you might be mistaken and miss out on a big future success, not doing so is more costly as it leaves you with less time to evaluate those companies that you believe are much more likely to become big successes. The more startups you’ve seen, the better your intuition about what is likely to develop into a big success becomes, so the higher the cost of not trusting that intuition.
Second, among the companies that you decide to evaluate in further depth, you need to keep a running list (I keep an actual written list but this can also be a mental list) where you change the prioritization of, add, or drop startups as you do more research into each company and as new opportunities arise. Although there may be 5 to 10 interesting companies on your list, you can only properly research and deeply think about a few (in my case 2 to 3) of these at any given time.
The rest just have to wait, even if this means that you miss out an a big future success. With experience and the pattern recognition that comes with it, the likelihood of this happening will fall over time.