The Signal Stack: Building a Multi-Layer Sourcing System

The most common mistake in signal-based sourcing is over-reliance on a single signal. A company that just raised a round is interesting. A company that just raised, tripled its engineering team, saw 5x web traffic growth, and got featured in TechCrunch is compelling. The difference is the stack.

Layer 1: Hiring Velocity

The foundation of any signal stack. Hiring is the most reliable leading indicator because it represents committed capital allocation. Companies do not hire speculatively — they hire because they see demand.

Key metrics:

• Absolute headcount growth (percentage change over 90 days)
• Quality of hires (where are new employees coming from?)
• Role composition (engineering vs. sales vs. operations)
• Seniority of new hires (IC vs. leadership)

Layer 2: Funding Activity

The most commonly tracked but least differentiated signal. Everyone monitors funding rounds. The alpha is in tracking less obvious funding signals:

• Bridge rounds (often not announced publicly but detectable through SEC filings)
• Investor syndicate changes (new investors joining the cap table)
• Grant awards (government and foundation funding that precedes private capital)
• Revenue-based financing (signals cash flow strength)

Layer 3: Traction Indicators

The hardest signals to track but often the most valuable:

• Web traffic trends (SimilarWeb, Semrush proxies)
• App store rankings and review velocity
• Social media follower growth and engagement rates
• Job review site activity (Glassdoor, Indeed reviews as employee growth proxy)
• Customer logo tracking (LinkedIn company page followers, customer case studies published)

Layer 4: Press and Visibility

Media coverage correlates with growth but is a lagging indicator. The value is in tracking the trajectory:

• First major press mention (company moving from unknown to visible)
• Press frequency acceleration (going from 1 mention to 5 mentions per month)
• Quality of coverage (industry press vs. mainstream vs. Tier 1 tech press)
• Conference speaking slots and award nominations

Layer 5: Product Signals

Product activity signals commitment and capability:

• New product launches or major feature releases
• API launches (signals platform strategy)
• Pricing page changes (signals go-to-market evolution)
• Integration partnerships announced
• Open source activity (GitHub stars, contributor growth)

Layer 6: Market Timing

Contextual signals that affect the entire sector:

• Regulatory changes that create tailwinds or headwinds
• Large exits in adjacent spaces (validates the market)
• Incumbent stumbles (creates opportunity for challengers)
• Market size revisions from analysts

Building the Stack

The key is weighting these layers according to your thesis. For seed-stage investing, hiring velocity and product signals might matter most. For growth-stage investing, traction indicators and funding activity dominate.

Ted allows you to configure signal weights for each thesis, ensuring that the scoring model reflects your specific investment approach. The result is a personalized signal stack that surfaces the companies most relevant to how you invest.