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3 ways to use your CRM software to support your networking strategy

As a venture capitalist, it’s important to recognize that customer relationship management (CRM) isn’t just about technology. It’s also about strategy. Navigating the relationships you manage within your professional network requires a business strategy that capitalizes on CRM technology.

The right CRM can help optimize your deal pipeline management, while also promoting the satisfaction and loyalty of your portfolio companies, limited partners, and other business partners. Here are three ways that you can ensure that your CRM is not just a tool, but also an integral part of how your team collectively manages the relationships that drive your investment strategy. 

Use your CRM to power your customer intimacy strategy 

UK CRM consultant Matt Eccles has detailed how CRM supports a venture capital strategy. In particular, he says that CRM is the foundation of your customer intimacy strategy, meaning a strategy based on being highly attentive to your customers’ needs. Your key “customers” include your portfolio companies, partners at your firm, investors, and other important people in your network. Eccles advises that you leverage data and insights that you glean from your CRM to provide value to your customers. 

Paul Arnold, founder of seed-stage venture capital firm Switch Ventures, adds that one of a venture capitalist’s primary strategies should be to add value. He explains that the most common way for VCs to do that is by improving portfolio company operations through recruitment, marketing, partnerships, sale, operations, and board support.

“Adding value is a real strategy because it moves existing investments up the curve...it's the promise to your founders to be their partner." - Paul Arnold, Founder at Switch Ventures

“Adding value is a real strategy because it moves existing investments up the curve...it's the promise to your founders to be their partner. And it earns you the right to be involved with great founders.” A venture capital CRM automatically captures connections to valuable business partnerships that you can then share with your portcos.

In much the same vein, Mar Hershenson, founding managing partner at Pear VC has explained the value of “paying it forward” when it comes to a venture capitalist’s network. “As an early-stage investor, my constant focus is finding new ways to turn my connections into my portfolio’s next hundred opportunities.” Hershenson says. With Affinity, Pear Ventures’ portfolio companies are able to filter and query their network to find the most valuable connections to new potential hires, customers, and service providers that can help them improve operations.  

Leverage your CRM to support an operational excellence strategy  

Eccles also recommends that you use your CRM to support an operational excellence strategy. This involves improving operational and administrative tasks like onboarding new portfolio companies, managing leads and opportunities, and ensuring that you don’t drop the ball on key relationships

One vital area where a venture capital CRM platform can drive operational excellence also involves reducing time spent on manual data entry. Choosing a VC CRM that prioritizes automation and ease of use means you can focus on strategic, high-impact relationship management rather than data entry.

“I remember viscerally dreading the need to manually type...into Salesforce every time I created an account...” - Jon Ma, Whale Rock Capital Management

“I remember viscerally dreading the need to manually type in the company name, URL, address, state, zip code, funding information, and description of the company into Salesforce every time I created an account,” says Jon Ma of Whale Rock Capital Management. With traditional CRMs like Salesforce he and his team were unable to figure out who had reached out to whom because the team wasn’t manually logging every interaction. 

Switching to Affinity was game-changing for Jon. He explains, “When you add a company to Affinity, the product will immediately auto-populate all the fields that matter like total funding, previous investors, location, etc. Most importantly, Affinity will pull all the previous emails sent to the company’s domain.”

Ultimately, when you choose a CRM that has robust automation capabilities, you’ll be able to focus on your relationship management strategy—not tedious data input. 

Make your CRM the foundation of a “source better” management strategy   

In addition to seeing a need for “adding value” as part of a VC strategy, Paul Arnold’s other two VC investing strategies are: source better and invest better. Your CRM directly drives your ability to uncover new opportunities within your existing network and find new sources of warm introductions.

According to Arnold, a primary focus for “sourcing better” is outbound sourcing. By harnessing relationship intelligence to understand the true strength of your relationships, you can use the data in your CRM to inform your outbound sourcing strategy. You can get a comprehensive picture of connections on your team and ensure that the prospective founders you source are the ones with whom you are more likely to forge a strong relationship. 

CRMs have been around for decades. Yet, they continue to be viewed as mere technology tools that are distinct from a VC’s overall strategy. Teams dread traditional CRM platforms that have to be managed manually and use more time than they save. CRM software built for the relationship-driven world of venture capital helps save you time and build a lasting relationship management strategy supported by modern technology. 

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