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Deal Prospecting Network Management Relationship Management Venture Capital

A VCs four most valuable connections for sourcing deals and conducting diligence

By Shubham Goel

If you want access to the next best investment, you need to know where to find it. Hint: It is already in your network.

At Affinity, we have worked venture capital firms of all kinds: from small to large, West Coast to Europe. Time and again, we found that VCs face the same problem of not having an organized workflow for sourcing deals and conducting due diligence. Consequently, they lose out on key opportunities which they should have captured and waste tons of time searching for intel they could have had at their fingertips.

If you’re a VC and are looking to optimize this part of your workflow, you must first identify the key contributors to your current deal-flow and diligence process. Only then can you monitor these connections, make a plan to keep in contact, and eventually make that golden investment.

In this post, we will walk you through the four primary ways in which many of our VC customers think about organizing their future sourcing efforts:

Stay in touch with top introducers

You already have individuals in your network who are sending you deals: other investors, founders, bankers, etc.

But do you actually know who they are? Who are the people helping your firm the most?

By cultivating a list of your top referrers, you can choose to contact them with regularity. Staying in touch will ensure they remember you when they see a great investment opportunity in the future.

Affinity helps you identify this list of people automatically, and with Smart Reminders, you will easily remember to keep in touch.

Build relationships with co-investors

Another great way to increase deal-flow is building relationships with the co-investors in your existing portfolio, or investors in the companies your firm wishes to invest in. Build this list of investors, get an introduction from someone on your team to relevant individuals, and start building the relationship!

Here’s how you would develop this list using Affinity automatically.

Create watchlists of companies in your current network

Your firm has already considered many companies for which it perhaps wasn’t the right time to invest. Take some time to list and label these companies. Were they seed stage companies in Healthcare? AI companies post Series A? In this way, your team can quickly develop a go-to watchlist based on your investing thesis. By periodically revisiting this watchlist during your Monday Meetings and making sure you’re keeping in touch with them, your team can avoid missing the next important investment opportunity.

Here’s a quick demonstration of how you can accomplish this with Affinity’s Saved Filters.

Keep track of strategic advisors

How many times have you looked at a compelling opportunity and wondered, “Who should I reference check this against? Do we know anyone in this space?”

The answers to these questions lie buried in your and your colleagues’ mailboxes. Work with your colleagues to align on a set of labels to categorize your potential advisors (e.g., people working in Healthcare, located in New York, or just other CEOs). Once you sort your advisors among these categories, you will know who to turn to when vetting deals. Affinity can thoroughly assist with this process by automatically categorizing your advisors using public data integrations. See here for an example.

I hope this post illuminated the four sources from which you can attain new opportunities and gave you some action items you can start on today. If you’d like to see how Affinity can help act on these points, please sign up for a demo here. I’ll be back soon with another post where I will discuss how to best manage your deal-flow. Stay tuned!
how to grow your network guide

Deal Prospecting Network Management Relationship Management Venture Capital