How the right CRM makes you a better dealmaker

In relationship-driven industries like private capital, a firm’s competitive advantage can be heavily influenced by the breadth and strength of its network of relationships. 

But relationship data is complex. For firms to turn that web of data into winning deals, everything—from personal information, to where a deal originated, to the best point of contact—has to be tracked in a centralized location. CRM (customer relationship management) databases let you collect, organize, and make sense of that data, so you can use it to source and close more deals. 

In this article, we’ll explore what a CRM database is and how private capital firms can use it to drive dealmaking.

Key takeaways

• A CRM database is a tool that centralizes important insights, like contact information and deal data, to help firms win more deals.
• The right CRM database does more than just store information; it can support investors with managing pipelines, enabling automations, uncovering connections, and strengthening relationships. 
• Affinity CRM is designed for investing, using activity capture and relationship intelligence to help VC and other private capital firms find and win high-quality, thesis-fit deals. 

What is a CRM database?

A customer relationship management database is a hub where all customer information is stored once it’s collected. While it’s referred to as customer relationship management,  it doesn’t only refer to customers in the traditional sense. In private capital, a CRM can be used to store data and insights about founders, investors, and other key stakeholders in a firm’s network. 

There are three main types of CRM databases:

• Operational, which focuses on deal creation and conversion.
• Analytical, which makes sense of large amounts of contact information to provide insights.
• Collaborative, which aims to facilitate collaboration between multiple teams.

Centralizing deal and customer data in your CRM database enables investment teams to share, add to, and report using that data. People from across the firm can view contact information in a customizable dashboard, while leaders can assign dealmakers to specific deals and track pipeline progress. Operations teams can develop reporting to make more informed decisions. And team members like associates can use that data to inform outreach, messaging, and relationship-building activities, to get into the best deals.

Core elements of a CRM database

A CRM is more than just a fancy Rolodex. The right private capital CRM tool offers various capabilities that enhance the dealmaking process, from managing deals in the pipeline to preparing for Monday morning team meetings.

Let’s take a look at some of the core elements of a CRM database that make it a powerful tool for investors.

Contact management

Keeping all of your company and people data in one place is crucial. Once stored in a central location, anyone within your team assigned to a particular deal can access data when they need it, while staying up to date on the relevant deal context.

And if you can collect that contact information automatically—without the need for hundreds of hours of manual data entry—even better.

Deal and pipeline management

With the right CRM software, it should be easy to assign people to specific deals, see who's already reached out, and determine next steps. You can track progress objectively, and real-time updates are visible as deals move through the pipeline.

This is incredibly important in private capital, where deals can have multiple touchpoints within the organization and take several months to come together, increasing the need for accurate and collaborative deal tracking.

Marketing automation

While VCs and private capital firms may not have traditional marketing efforts or a dedicated marketing team, they still conduct brand and reputation-building activities. For example, sending out email marketing campaigns about portfolio wins and successes, promoting internal changes, and organizing networking events. 

A CRM database streamlines the process of these marketing activities, while bringing together all their results in one place.

Advanced reporting and intelligence

One of the most valuable uses of a CRM system is the ability to analyze and report on your data. This translates to a better understanding of your firm's business and new potential insights that can greatly improve decision-making and pipeline forecasting. 

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Integration with other tools

A good CRM database doesn’t live in isolation, it should connect with the rest of your tech stack. Integrations improve investor workflows and improve deal productivity and efficiency. They can also enrich the data within your CRM by capturing activity directly from your email and calendar or through third-party data enrichment.

Benefits of a CRM database

Using a CRM database can help save you hundreds of hours of data entry, while smoothing out the deal process and ensuring everything is privacy compliant.

The benefits of using a CRM database in private capital include:

Automation

Firms spend hundreds of hours manually entering data and updating contacts and deals. CRM databases, like Affinity, save dealmakers 200+ hours a year by automating the entire process. 

After every interaction, Affinity automatically creates a CRM record for each contact and company and then enriches that record with data from industry sources like PitchBook, Dealroom, and Crunchbase. Not only does this save time, but it removes the risk of human error that comes with manual data entry.

AI tools, like Affinity Deal Assist and Notetaker, automatically process deal notes, files, and meeting transcripts and add the data to your CRM—uncovering more actionable insights while automating your workflow.

Streamlined deal flow management

Rather than tracking deals in spreadsheets, a CRM can be used to monitor deal progress and keep teams updated with real-time deal statuses. 

Centralizing your pipeline in a CRM keeps all deal information in one place, making it easy to prioritize deals based on all relevant factors like stage, industry, potential value, strategic fit, or opportunity for warm introductions.

Smoother deal processes

With all portfolio company and prospect information in one place, the best CRM allows dealmakers to easily view the information they need when they need it. The right CRM also integrates multiple data streams and apps, combining all that data in a usable fashion. 

Not having to sort through a mess of spreadsheets—the reality for some firms who have not yet transitioned to a modern CRM—leads to a better founder experience and allows for better portfolio company support. You can navigate and oversee complex workflows with multiple touchpoints at every step along the way.

Maintain data privacy and compliance 

Prospects and portco contacts expect their data to be protected—and regulatory missteps can harm your firm’s reputation just as much as a data breach.

CRMs made for dealmaking maximize the value of the data and insights held by private capital firms. The software gives your team access to all relevant data while protecting it from any possible intrusions with enterprise-grade security and compliance, so you know your data is well protected. 

Improved relationships

Stronger relationships can unlock better decision-making and increased deal flow. An effective CRM system doesn’t just keep track of relationships, it helps improve them. It provides teams with a full history of a contact’s relationship with your firm, so investors have the context to personalize outreach, whether they’re reaching out to prospective founders or subject matter experts. It also provides dealmakers with visibility into a contact’s interactions, so you can follow up at the right time and stay on top of your most important relationships.

Relationship intelligence tools, like Affinity, layer additional relationship insights onto your CRM data, so you can understand the strength of every relationship in your firm and use them to identify lucrative deal opportunities.

Data-driven decision-making

A CRM can help your team make smarter decisions, faster. With all your deal and relationship insights in one place, you can track win rates, performance, and other metrics based on your investment criteria.

With quantifiable insights, you can focus your efforts on the strongest deal sources and make informed deal decisions with as much data as possible.

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How to audit your CRM database

A strong CRM database has the potential to power lucrative deals. But only if it’s being used to its full potential.

If dealmakers can’t trust the data in a database or it contains incorrect or outdated information, they’ll turn to different methods of sourcing and managing deals. When CRM adoption plummets, it negates the benefits and ROI. While CRM challenges can happen for a variety of reasons, one common challenge is bad data hygiene.

Regular audits and data cleansing can help maintain CRM data integrity and improve effectiveness. Set aside time to correct or update any incorrect data—Affinity CRM flags duplicate records, which simplifies this part of a data hygiene audit.

Even the best systems have some degree of data decay as contact information changes and key contacts move between companies. Audits help you stay on top of this data to the best of your abilities. While going through your data, note if any input field seems to be blank more often than not. And eliminate unused data fields to limit doorways for bad data to enter your CRM system.

How to optimize your CRM platform

Clean and usable data is just one side of your CRM. You can optimize it even further to improve dealmaking with activity capture and relationship intelligence. 

Activity capture

For every deal that’s won, dealmakers interact with dozens of contacts, if not more. Every email and meeting invite creates background data—what some refer to as data exhaust.

These interactions contain names, email addresses, phone numbers, social media handles, job titles, and relationship insights that should be captured and stored in your CRM database. The data can be automatically fed into your system with a CRM like Affinity—fueling your team's network and providing more data to analyze. Affinity captures the data across your firm’s ongoing communications through email and calendar events to create a dynamic and up-to-date system of record. 

When managing thousands of different relationships, knowing who is talking to whom and how often can be a source of valuable information. Email and meeting cadence can be tracked alongside a deal to view a correlation between contact frequency and deal success. 

By capturing all this activity data, you can turn it into insights that improve the fund’s performance. 

Relationship intelligence

Private capital is a relationship-driven industry, with almost 60% of deals coming from people that investors already know. 

Relationship intelligence helps private capital firms stay on top of their relationships, so dealmakers can focus on what they do best: closing deals. Most CRMs lack any kind of real relationship analysis, but with Affinity’s integrated intelligence, you get insights like the warmest and fastest path to a prospective deal—helping you find, manage, and close high-quality investments.

By uncovering your strongest connections, you can find the best paths toward opportunities that may otherwise be hidden in your network. And real-time relationship scores and triggers help prevent important relationships from going cold.

Look beyond traditional CRM databases with Affinity

Discover the CRM built for private capital. Affinity brings relationship intelligence, deal management, and enriched deal data together to help VC teams and investors make stronger deal decisions. With Affinity, firms can:

• Stay up to date on your firm’s network with automated activity capture, eliminating hours of manual data entry for every user.
• Find the warmest paths to your next deal with relationship insights that drive dealmaking.
• Make faster, more accurate deal decisions with contact and account records enriched with data from Affinity and 40+ trusted sources.
• Double down on the behaviors that win high-quality deals with enhanced analytics and reporting.
• Accelerate deal velocity and streamline workflows with integrations for all the tools your team already uses every day.

It’s time to look beyond traditional CRMs and learn what Affinity can do for you. Request a demo today.

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Using Salesforce as your CRM database? Layer the power of activity capture and relationship intelligence on top of your existing CRM with Affinity for Salesforce. 

CRM database FAQs

What is CRM database software? 

CRM database software is a SaaS tool used by businesses to store and manage customer data to close deals and drive business growth. 

CRM databases are often used in customer-facing industries, such as SaaS and e-commerce, with the goal of engaging and elevating the customer experience. But CRM databases aren’t exclusively used by customer-facing industries. There are dozens of industry-specific CRM solutions out there to support various business needs, including ones specifically made for private capital firms, like Affinity

What are the 3 types of CRM?

There are widely considered to be 3 types of CRM: Operational CRM, Analytical CRM, and Collaborative CRM.

• Operational CRM focuses on streamlining deals and customer interactions.
• Analytical CRM focuses on unifying and collecting data to generate insights.
• Collaborative CRM focuses on boosting communication and collaboration within a team.

VC firms should use a CRM purpose-built for private capital teams, like Affinity, that brings together the operational, analytical, and collaborative functionality investors need to streamline their dealmaking process and close deals.

What is the best CRM database for private capital firms?

The best CRM database for private capital firms is Affinity. 

Affinity is a CRM designed for dealmaking, with relationship intelligence, activity capture, and pipeline management tools built to help deal teams source, manage, and close lucrative deals. 

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