In venture debt, the quality of deals is crucial for a strong portfolio. This article offers advanced strategies for sourcing high-potential deals while avoiding pitfalls like adverse selection and chasing popular investments. Lenders should focus on companies with solid fundamentals rather than relying on equity sponsors, as many recent VC-backed companies underperform. Building long-term relationships with founders and boards is essential, enabling better terms and transparency. Direct communication with founders helps align incentives and avoid intermediaries. By employing these disciplined approaches, lenders can secure profitable deals and enhance returns while minimizing risks.