In the midst of an uncertain market, data-driven firms are winning—and the most successful ones ensure this mindset is implemented across every team member, from Associate to General Partner.
At Campfire 2023, we spoke to Managing Partner at Pear VC, Mar Hershenson, on the topic of ‘From Insights to Investments: Strategies for Success as a Data-Driven Investor’. She shared how the data-driven mindset has been adopted in her firm.
Here’s a selection of the insights she shared, along with time stamps to help you dive deeper at key moments:
Having actionable insights on your network is a dealmaking differentiator
While it’s increasingly an investor’s market, that doesn’t mean it’s an easy one in which to source and close the highest quality deals. On the contrary, competition is on the rise as more firms pursue deals with a narrow set of criteria—things like solid fundamentals, revenue traction, and product-market fit.
In Hershenson’s experience, the best deals will have multiple VCs vying to win and to make an impression, you have to understand and solve for what they need—fast. For example, if a founder needs access to sought-after developers, Hershenson looks to her firm’s network to find candidates and offers to make those intros. Once that trust has been built and Pear VC closes the deal, the team introduces that startup to a wider network of individuals that can help the business flourish. In every instance, the network is the differentiator as a warm intro goes a long way.
Use data to help founders prepare for their next round
In addition to helping founders connect with top talent, Hershenson shared that many are also hoping for warm intros to potential customers and for help with their next round of investment. “I spend a lot of my time helping our companies raise the next round, and it’s really like a game of chess,” she said.
Hershenson explained that being able to identify the investors in your network that are tailored for a very specific company is of great value for founders. From there, she can look into Pear VC’s relationship intelligence data to determine who at the firm is the best point of contact to make that intro.
With the firm’s entire communication data in Affinity, she can also look at past interactions to see what happened when other companies in her portfolio dealt with that fund.
In the game of chess founders make to raise their next round, every detail counts. Hershenson’s team not only uses data to find the right founder and investor fit, but also to recommend who they meet with first based on areas of expertise. She said, “Knowing which order you will see each investor so that you get the right feedback” can make a real difference.
Measure founder execution as a key metric
In Venture Capital, every single interaction you've had with a person is a detail in the story you have about them. Hershenson explained, “Founders aren't dots, they're lines. There are so many signals to understand how well someone is executing.” For example, you can look at how quickly a founder responded to your email, or whether they followed through on what they said they were going to do.
You need the right tech in place to be able to do this at scale. Pear VC tracks more than 120,000 people using Affinity, which provides an accurate source of record for everyone in the firm. Hershenson outlined that they use this to cater portfolio support in a data-driven way: “We do a clustering algorithm on the data for our founders…then we can observe them with those eyes and make decisions that way.”
That’s a wrap. Where will you go next?
- Read our top 10 takeaways from Campfire 2023
- Speak to us about how Affinity fits with your firm’s data-driven future
- Watch all the Campfire sessions on demand
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