A customer relationship management (CRM) platform is the foundation of your professional network and deal workflows, but if your software doesn’t support how you and your team do business, you’ll end up hitting a dead end. You’ll either have to hold onto technology that doesn’t do what it needs to, or you’ll have to scrap it and start the search over again.
In this guide, we’ll walk through everything you need to know to find a CRM built for venture capital, help you identify what you and your firm need from a CRM, and discuss how choosing the right CRM technology is a competitive advantage in an extremely competitive market.
What is a CRM for venture capital?
Your venture capital firm is defined, in part, by the relationships shared across its network. These complex relationships are different from traditional, transactional sales relationships and have to be nurtured and maintained over long periods of time.
CRM platforms are built to help manage interactions and relationships with customers and prospects. And a CRM for venture capital is more than a repository of information about your relationships—it serves as the foundation for every deal that your firm manages, from an introduction to pitch to close.
Since a CRM supports so much of your business’ functionality, it’s important to evaluate your current business needs and understand how a CRM may address them.
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Why deploy a CRM and how do you know if you’re ready?
A properly-used CRM should improve how your firm operates and integrate with your existing workflows to improve, not uproot, your operations.
Think about your firm’s current pain points surrounding deal and relationship management and ask:
- Where is my team storing data? Storing data in one place is crucial for collaboration across your team and avoiding crossed wires.
- How is my team managing the volume of data entry? It’s important to understand how often your team is updating their records and any gatekeepers preventing them from entering data.
- How is my team collaborating? Efficient knowledge sharing helps your team move quickly in the same direction.
- Does my current system of record meet our expectations? The ideal system should maintain a balance between being easy to use and sophisticated enough to provide insights about your data.
After auditing your existing deal and relationship management processes, perform a full cost-benefit analysis to better understand the return on investment of using a CRM.
Cost-benefit analysis
“How much is my CRM going to cost?” is probably one of the first questions that comes to mind when considering adopting a CRM. The short answer is that adopting the right CRM can actually save costs in the long term.
What are the immediate costs of a CRM?
- The platform: The sticker price of each CRM system will vary, but keep in mind that an increased monthly cost could be tied to product features that save money down the line.
- Set-up fees: This is the cost of initially implementing a CRM and includes the cost of engineering resources, data migration, platform customization, training, and process changes.
What are the long term costs?
- Customer support: Tiered support options give you the flexibility to choose a level of support that matches your needs
- Ongoing training: Your team will need training when you deploy a CRM, but there is also an ongoing cost of training new hires as your team grows.
What are the tangible benefits?
- Streamlined deal flow: A new venture capital CRM should help you improve the quality and quantity of deals in your team’s pipeline—from warm introductions to closed deals.
- Increased adoption: Your team should be actively using your CRM. A user-friendly system helps them trust their data and make more informed decisions quickly.
- Saved time: Our research has found that a CRM can save over 200 hours per person per year. Multiply that by your hourly cost of labor to get an initial estimate. Your team can also use this extra time to source more deals and build relationships.
What are the intangible benefits?
- Improved user experience: The CRM needs to be easier to use and more flexible for day-to-day data management, pipeline management, and reporting than your previous solution.
- Heightened security: Data security and privacy help protect your proprietary information in a hyper-competitive environment.
Affinity can save your team an average of 220 hours of data entry per person a year.
What you should be aware of with a CRM for venture capital
Having a CRM that is built to help you manage deals, rather than traditional sales, encourages broader adoption across your team and can save your firm time. It also helps improve the underlying strategies that are vital to becoming a world class venture capital firm.
Managing sales vs. managing deals
Traditional CRM solutions are primarily designed for transactional selling, but venture capital deals follow a different trajectory. They involve sophisticated, relationship-driven dealmaking processes.
For example, choosing to invest in a new opportunity isn’t a purchase—it requires a belief in (and a commitment to) an organization and a personal connection to the company’s founders.
Nurturing ongoing relationships is just as important as evaluating new deals, and having a tool set that supports this change is crucial.
Encouraging adoption
Having an empty relationship management platform is more damaging to your team than not having one at all. Traditional CRM platforms that require more manual data management often look closer to an empty warehouse than a robust, living source of truth.
Low adoption rates lead to a low-value system with incomplete data. And a low-value system leads to even lower adoption rates.
Sharing a single platform that consolidates all of your firm’s contacts, automates activity tracking, and is easy to customize encourages every member of your team to use it.
Saving time
Time is one of a venture capital firm’s most important assets. By automating manual data entry and providing built-in analytics and reporting, everyone at your firm can spend more time interacting with clients and progressing deals, and less time on entering data.
How Affinity can make a difference for your team
Our team has met with thousands of venture capital firms around the world, and we consistently hear that their business needs aren’t being met by their current CRM. Affinity is built to integrate directly with your most important workflows as a venture capital firm.
Our venture capital CRM is as lightweight and easy-to-use as a spreadsheet and as sophisticated and robust as a large-scale CRM platform.
Automated relationship intelligence algorithms ingest a complete historical record of your firm’s interactions, automate your data entry and data management, and provide detailed relationship scoring to provide greater insight into your most valuable relationships.
With Affinity you can show up smarter to every meeting and close deals faster.
“We like that Affinity is built for the private capital markets. Because of its views and integrations with CrunchBase, Dealroom, and PitchBook, we can pull data into a central repository, filter for it, and track the companies that we're aware of in a way that allows us to see value across our firm”
- Charlie Rexford, Chief of Staff, Sapphire Ventures
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Business requirements
Before you decide on a CRM, it’s important to understand the key business requirements that a CRM can help address.
Use this section as a checklist for how your firm will use a CRM for the following activities:
- Deal management
- Automated activity tracking
- Relationship intelligence
- Contact management
- Analytics
- Flexibility and customization
Deal management
As mentioned earlier, since the sales process and the dealmaking process are entirely different, your CRM should also be different. A CRM tailored to the venture capital dealmaking process should provide a complete, end-to-end overview of your deal management process.
This includes a variety of ways for you to view, organize, and share your pipeline information, so you have a comprehensive overview of every deal at every stage. With Affinity, you can instantly see all of the deals your team is working on in a single view that you can refer to and dive more deeply into as needed.
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Automated activity tracking
It can be challenging to remember every call you made or email you sent in a day, let alone what everyone else at your firm is doing. Automated activity tracking ensures that you have a record of every email, call, and meeting with a contact.
This means your team can collaborate on deals without duplicating work or potentially damaging your firm’s reputation by having multiple team members working a single opportunity. Clearly visualized activity timelines outline exactly who reached out to a connection and when, so anyone can easily pick up the conversation where it left off.
All our data is now centralized in Affinity, so information is never siloed with a single team member and we all understand the relationships among the entire team’s business network.
- Kevin Zhang, Partner, Bain Capital Ventures
Relationship intelligence
Relationship intelligence takes a CRM from a record-keeping system to a platform that provides unique insights into your team’s collective network. Quantifying relationship strength can take the guesswork out of your team’s outreach efforts. You can source new deals based on actionable data, and find new introduction paths to contacts that would otherwise be hidden away in individual spreadsheets.
Data enrichment further expands your team’s knowledge by providing additional data from third-party partners, providing more context for every relationship in your CRM. By expanding your existing data set, a venture capital CRM makes sure you always have the information you need for every deal at your fingertips.
One of the great things that Affinity does is it creates visibility across the teams… that is the relationship intelligence that we're trying to unlock and super-power within Munich Re Ventures
- Pedro Carrasco, Senior Operations Manager, Munich Re
Contact Management
The most popular reason teams implement a CRM is to increase efficiency. When it comes to relationship data entry, hundreds of emails and calls can turn into hundreds of hours spent on logging them in a manual database or, worse yet, a spreadsheet.
Traditional CRMs are intended to make teams more efficient, but they become a hindrance to productivity when investors have to manage them manually. Affinity automates contact management to free up teams to focus on their deal management rather than data entry.
Affinity has completely changed the way we do business, we are now far more organized and streamlined. Automatically logging contact details, emails, and meetings have saved us so much time in an administrative sense.
- Shannon Potts, Marketing Manager, Pemba Capital Partners
Analytics
Analytics dashboards allow your team to view and act on your important data quickly. Affinity’s embedded reporting and analytics gives your team custom-built reporting dashboards that update automatically as new data is captured.
Your most important KPIs and reports should be a single click away, with built-in analytics you can ensure you are actively working to meet your most important goals and identify gaps in your pipeline management.
You can also share your dashboards directly with your LPs and provide them with consistent updates on your firm’s progress. Establishing a consistent cadence of communication creates a more transparent relationship with your investors and ensures your firm has the support it needs to grow.
Flexibility and customization
Traditional CRMs, especially large-scale enterprise suites, rely on multi-person implementation and development teams to add additional fields or buildout new workflows as needed.
No two investment processes are identical, and being able to add or alter columns on the fly to match your needs with a big system can be cumbersome at best and impossible at worst.
Customizing workflows without needing to wait for a third-party gives your team the ability to easily manage relationships with LPs, current portfolio companies, and new deals all in one place.
Having the option to make changes that support new strategies or areas of focus can enable your team to move at their own pace instead of the speed of your CRM vendor’s support team.
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Platform requirements
These differentiating features will separate good options from the right one for your business.
Use this section as a checklist to identify places that a CRM should improve compared to your existing solution at the platform level:
- User experience
- Automation
- Deployment
- Support
- Security
- Integrations
User experience
“Will my team use a CRM?” In the traditional CRM market, the answer to this question is often a resounding “no”.
If the software itself is intuitive, it will be much easier to get your team to use it. Improved flexibility allows you to manage your own changes and updates as needed, and additional accessibility tools—like a mobile app—can make modern CRMs something that teams want to use.
Affinity takes all the best parts of RelateIQ and significantly improves on them. For us, it’s the perfect blend of great product design, feature richness, and workflow integration.
- Ben Blumenrose, Co-director, Design Fund
Automation
When dealing with a high volume of deals and relationships, human error can become a costly issue.
For your VC firm, low quality data can lead to team members not being aligned, overlapping work, damage to your firm’s brand, and ultimately lost deals if accounts are not carefully monitored and updated regularly.
When your firm is managing hundreds of deals, involving thousands of connections, tracking relationship and deal data is essential to success. Tracking it manually shouldn’t be.
With Affinity, you can be running on your new CRM within 72 hours.
Deployment
The timeline from purchase to deployment will vary based on the size of your organization, the volume of data in your existing system of record, and the capabilities of your CRM vendor.
Some CRM platforms, such as DealCloud, require long term implementation partners during the initial design because their systems are rigid. Managing these implementation teams becomes another factor in the process, and project management of this launch can have a significant impact on deployment time.
Affinity is able to extract historical data from your existing system so you can be up and running on your new CRM in 72 hours.
Support
Even if you’re managing most of your CRM independently, having a strong service and support system means that you’ll always be equipped to handle any problem. The level of service required post-implementation is contingent on your answers to previous questions about usability and flexibility.
Different CRMs, even among venture capital-specific CRMs, will offer different service options. Some may only offer an FAQ page or a ticketing system. More active support teams, like Affinity’s, can:
- Help with urgent questions through live chat
- Provide best practices and insights based on their industry expertise
- Assist in building and tracking your team’s KPIs
Affinity’s Customer Success team offers 24/7 support and personalized training to keep your team moving fast.
Security
With the right CRM, you can rely on certified, enterprise-grade security. A CRM for venture capital should also include internal privacy and sharing options.
Communication transparency enables new ways for your team to collaborate, but not every member needs to see every detail.
Venture capital CRM software offers customizable privacy settings that give administrators the ability to change visibility into specific events that have been automatically logged in the system—like protecting specific details of a meeting with an LP, while still recording that a meeting happened.
Integrations
Ensure that your CRM meshes well with your existing toolkit. For example, your team may rely heavily onOutlook for managing your emails. A venture capital CRM like Affinity gives you the ability to add contacts on an email thread to a specific list in your CRM, or add a note about a conversation, without leaving your inbox.
Integrations also go beyond applications. Another way to gain new value from your CRM quickly is to choose a venture capital CRM that integrates with 3rd-party data vendors to provide enriched data sets. Easy access to person and organization data from outside of your team’s network can provide new leads and fill in gaps in your team’s information.
Affinity offers integrations with many popular tools including Mailchimp, Typeform, Slack, Microsoft Teams, and more.
Choosing a CRM that grows with your team
As you get to the end of your evaluation checklist, if your requirements and expectations have been met, and you’re ready to make a change, make sure that your new venture capital CRM can grow with your team long-term. If your existing relationship management strategy doesn’t support your workflows today, don’t launch into another broken system.
Build a better venture capital firm supported by a modern CRM that automates your data management, enhances your team with relationship intelligence, and optimizes your most important workflows. Show up smarter and close your most important deals faster with a CRM built for venture capital.
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