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How to organize your deal-flow: lessons we learned from top VC Firms

organize deal flow

In this ever-changing venture capital ecosystem, few things are more impactful than quality deal flow. Top VC firms actively manage their incoming opportunities so they do not let a golden deal slip by. They are vigilant about maximizing deal flow and keep an eye out for top deals that may be heading their way. While working with leading VC firms, we have picked up some best practices for organizing opportunities. In this post, we outline some key strategies to get all your inbound deals into one place and create a powerful venture capital deal flow muscle.

Centralize your inbound deal flow

If you are effectively managing and using your network, chances are your team is getting bombarded with introductions and 1-pagers on companies that are seeking investment. With so many emails, it can be tough to sift through the noise and ensure that valuable information is not lost. Half of the battle top vc firms face is making sure you don’t miss any of these important communications. Affinity offers features so that you don’t miss relevant emails sitting in your inbox.

The other half of the battle is making sure that when one person receives important information, it is disseminated across the whole team. To effectively manage all of your inbound information, you must create a warehouse where this information can live on an ongoing basis. The best VC firms actively manage their inbound deals and know how to manage & use their deal flow most effectively. Here are a few strategies to successfully organize incoming opportunities into one centralized, accessible location:

Delegate someone on your team to be in charge of all inbound opportunities (most effective) 
  1. Set up a distribution email (something similar to deals@yourvcfirm.com). This will ensure that every team member has access to that email address
  2. As soon as anyone on your team gets an inbound opportunity, they should forward it to deals@yourvcfirm.com. This way, not only does everyone on the team get a quick look at the opportunity, but also the person handling deals has real-time access to all inbound information
  3. Either with our Chrome extension (if you’re using Gmail) or the “Deal Emails” feature, the inbox’s point person can quickly add all inbound opportunities to Affinity. This ensures all opportunity information makes it into one trackable place

Use the Zapier integration with Affinity to centralize opportunities automatically

  1. Everyone in your firm can simply forward the email to deals@yourvcfirm.com with the subject line of the email containing the deal’s name
  2. This will trigger Zapier to automatically add a new entry for this company in the deals list in Affinity
Ensure that everyone on the team allocates a weekly time to share opportunities they are watching:
  1. Go to the “All Organizations” tab in Affinity, which automatically pulls the new companies you talked to this week. Bulk select and add them to your deals list
  2. Look through your inbox for all the deals you saw this week and add them to your deals list

Organize deal notes & attachments

Along with adding opportunities, email attachments and notes that relate to an opportunity (e.g., pitch decks, growth plans, internal conversations, etc.) must be tracked and shared to organize deal flow as well. Fortunately, Affinity eliminates much of this hassle.

With Affinity’s chrome extension, our Google users can automatically attach any threads as notes and, with one button, add all email attachments to Affinity. Our Microsoft/Exchange users can accomplish the same by using the Deal Emails feature.

With only so many hours in the day, it’s most effective and efficient for investors to prioritize trusted referrals. Rosalie Seriese, an Investment Associate at AngelHubVentures, describes a common reality for investors, namely that firms such as AngelHub invests in a mere 0.5% of all deals they see. Of the five deals the firm funded in a recent funding year, four came via a trusted referral. The fifth investment received “an endorsement from a trusted source shortly after they contacted us.”

Centralizing inbound opportunities is key to venture capital success and getting the most out of your venture capital flow. There's no shortage of opportunity. Venture capitalists invest in only a small percentage of the investment opportunities that they come across. Jeffrey Glass, a partner at Bain Capital Ventures, explains, “In one year I see over a thousand business plans and meet on average with hundreds of companies, but ultimately only invest in one to two.” It's critical to organize your opportunities and make sure you're able to sift through the noise and uncover the noise. 

Stay tuned for our article detailing how to manage deals once they become portfolio companies. Stay tuned! 

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