You need to manage your venture capital portfolio. Which software tools should you use?

The way I look at it is two fold. External i.e. sourcing deals via platforms like Tracxn (India) and Pitchbook (US). Thats the simple part. The harder part is managing the deals internally i.e. evaluation. We use Affinity to manage the deal flow and allocate a stage (Screening 1 to IC) and Notion boards to manage the indepth analysis and research.

The use of platforms like Crunchbase, PitchBook, and Dataroom is indeed crucial for streamlining the deal sourcing process. However, it's important to note that while these tools provide a wealth of quantitative data, the qualitative aspect of startup evaluation should not be underestimated. A seasoned venture capitalist will also rely heavily on their network, industry insights, and personal experience in evaluating the team's quality, the startup's culture, and the potential market fit. Additionally, integrating AI-driven analytics tools can further enhance deal sourcing by predicting market trends and identifying unconventional opportunities that might be overlooked by traditional methods.

In my experience, Affinity is the gold standard for network intelligence. There’s simply no other tool that gives the insights needed to create serendipity for your portfolio companies. But where Affinity really shines is in pipeline management — it’s powerful to be able to both evaluate and manage your pipeline, while flexible enough to adjust to your firm’s unique way of doing business. This is an absolute first class product that has created a category in which it is the undisputed leader.

What you need is a structured method of moving startup leads through your funnel, with stages specific to your fund's investment process. To start, you can manage deal flow simply using Excel, but a visual dashboard makes it more engaging for you and while presenting to the team. Any CRM can do this, and there are many free tools such as Trello which enable this. Also keep in mind that you want to retain data and updates on these startups in a unified place. Often we see consistent newsletters from startups on progress and this can be a signal of reliability of the entrepreneur, and of course something we should follow.

Investmint.ai: The data driven investment platform that does predictive analytics with deep insights on founders and their companies; a complimentary tool that pitchbook, crunchbase and dealroom will only provide you with data, not the science behind it.. Launching beta in March & accepting investor testers..

In my experience with venture capital, effectively managing and supporting portfolio companies has been crucial. This involves not only tracking their progress but also providing them with guidance and resources. To aid in this, I've used tools like Carta, Visible, and AngelList. Carta has been instrumental for equity management, helping manage cap tables and valuations. Visible has been great for communication, allowing me to collaborate with portfolio companies and update stakeholders. AngelList has been a key platform for connecting startups with investors and talent, aiding in fundraising and networking. These tools have been essential in supporting portfolio companies to overcome challenges and increase their value.

Legacy VCs are using Carta, Angel List, and Visible, but ties have changed, and we are no longer required to string together 10 different software solutions to run a VC firm. The all-in-one tool for Venture Capitalist is Decile Hub. Deal memos, LP engagements, investments, employee notes, PACTs, LOI, and fund admin tools are now neatly packaged into one software platform. Decile Hub is for serious venture capital managers over AngelList. Even in the name, AngelList is geared for more "angels" and amateur fund managers. Unlike AngelList, managers using Decile Hub own their funds and get credit for their track record, whereas AngelList managers are consultants. Decile Hub provides a stable option and a full tech stack.

Tools like Carta, Visible, and AngelList are essential for operational efficiency in portfolio management. But beyond these, a VC's value lies in their ability to offer strategic guidance and mentorship to founders. Establishing a strong personal relationship with portfolio companies and understanding their unique challenges can be more impactful than any software tool. Also, leveraging a network of industry experts and seasoned entrepreneurs for mentorship opportunities can significantly accelerate a portfolio company's growth.

We killed Excel?? and implemented our end-to-end fund forecasting platform which provides immediate insights into our reserves and overall fund performance enabling informed decision-making. By consolidating our fund model, transaction history, and key performance indicators, we could eliminate data silos and streamline our decision making process but also enable way better back-office efficiency and institutional-grade reporting for our investors.

I find angellist and carta helpful. Angel list has helpful template documents and KYC/AML instruments. Carta provides sample agreements like stock options, SAFE, warrants.

Whatever you do, think of building your own! Over the years I hired a number of prominent groups that promise a solution from bespoke to off-the-shelf, only to realise that I was the one spending more time explaining my own data and getting them to implement something that I could simply build myself. There is plenty of talent available that can help you build your own interfaces and reporting infrastructure. It all starts with building a sound and efficient data infrastructure. Build a data lake to receive data from sources that then can be arranged, produced and eventually disseminated through a reporting interface like Power BI or Tableau. Why let someone else manage one of your organisations’ most valuable assets?

While Fundwave, Dynamo, and Pitchly are excellent for operational and reporting purposes, a deeper strategic layer is involved in fund management. This includes developing a nuanced understanding of market cycles, regulatory changes, and emerging sectors. Moreover, transparent and frequent communication with LPs (Limited Partners) is paramount. Engaging LPs not just through reports but through regular meetings, providing market insights, and involving them in the strategic direction of the fund can create a more robust investor relationship.

Given our experiences as allocators, Eric Woo and I founded Revere with this exact mission. Our platform sit at the intersection of workflow AI and automation, enabling allocators to gain real-time insights into their alternative portfolios. From automated data ingestion to dynamic dashboards/customized reporting, as well as advanced cash flow modeling and benchmarking tools, Revere was built by allocators (us) for allocators (you).

eFront: A comprehensive solution for managing the complexities of fund operations, including investor reporting, accounting, and performance analysis. Altvia: Integrates fund and relationship management to streamline LP communications, manage fund operations, and enhance decision-making through data analytics.

By using these tools, you can manage and support your portfolio companies more efficiently and effectively, and help them achieve their goals and potential. These tools can also help you improve your own performance, reduce costs and risks, and increase your opportunities and returns.

The venture capital industry is rapidly evolving with the introduction of blockchain technology, tokenization of assets, and the rise of decentralized finance (DeFi). Keeping abreast of these trends and understanding their implications is crucial. Furthermore, a growing emphasis on ESG (Environmental, Social, and Governance) criteria in investments cannot be overlooked. VCs should consider integrating ESG assessment tools into their evaluation process to align with the global shift towards sustainable investing. Lastly, the role of data in decision-making is becoming increasingly significant.

Security and Compliance: Ensure any tool you choose complies with industry standards for data security and privacy. Integration: Look for tools that integrate well with your existing software ecosystem to streamline workflows. Scalability: Choose solutions that can scale with your fund, accommodating more investments and more complex portfolio structures as you grow. User Experience: Opt for tools with intuitive interfaces and robust customer support to minimize the learning curve and ensure smooth operations. Venture capital is as much about relationships and intuition as it is about data and diligence. Incorporating the right mix of tools can enhance these aspects to make more informed decisions.

Investing in venture capitalization will always be an intuitive thing. Gut feel. So there are no tools. So now let us try to decipher what is a - gut feel. It is simply a calculated guess based on your EXPERIENCE IN THAT FIELD! Focus on my capitalized words and you will have better chance at success. I am reminded of the Nobel prize winning novelist’s words- Good Luck is What Happens When Preparations Meets Opportunity ! So you definitely need luck to succeed but are you prepared in your field of enterprise for it ?

Managing a VC portfolio entails more than deal sourcing, portfolio management, fund management, and reporting. It also involves conducting due diligence, facilitating communication and collaboration, tracking performance, managing relationships, offering value-add services, planning exits, ensuring regulatory compliance and maintaining data security. Utilizing software solutions tailored to these aspects optimizes efficiency, transparency and ultimately, the success of the investment strategy. Additionally, employing software for due diligence streamlines market analysis, financial modeling and risk evaluation. It also aids in tracking key metrics, automating compliance processes and implementing robust data security measures.

The partner with the least inclination towards innovation significantly influences the software choices at a VC. Prior to launching our first fund, I asked many VCs about their tech stack to learn what works best. I thought I would learn the most from large, well-established VCs. After all, large funds can easily afford any software they like, whereas small funds are always tight on budget. I was wrong. I found that size did not correlate with how innovative the tech stack was. The most relevant variable turned out to be buy-in from every decision-maker, i.e., partner, at the VC.