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In the past few years, multiple technologies and software solutions for venture capital firms have emerged. From VC-specific CRMs with relationship intelligence to fund administration and other back-office software, the average tech stack at a VC firm looks considerably different than what it did a decade ago when Excel spreadsheets and Outlook emails and calendars reigned supreme.
All these new software categories have been designed with functionality to optimize, automate and streamline the venture capital management process, making it easier for emerging managers to set up funds and invest in more startups.
Most of these vc tools and solutions focus on automating time-consuming processes like data entry, providing stakeholders with access to data in real-time via dashboards, automating the creation of reports and KPIs, etc.
Below are the various categories of software that comprise the most common “tech stack” at venture capital funds. These are in addition to Google and your standard office worker productivity applications (e.g., email, calendar, Microsoft Word, PPT, Excel, — and, given it’s 2023, Slack):
Network + Deal Tracking
LinkedIn: Venture Capital is an incredibly relationship-driven business — which drives every aspect of a deal, starting from fundraising to sourcing, due diligence, and portfolio management. While the LinkedIn product and ecosystem have (significant) flaws, it is still one of the best systems for venture capitalists to understand who knows who in the relevant domains.
A CRM: To track and manage deal pipelines, complex deal cycles, keep track of metrics, and, increasingly, relationship management.
There are various types of CRMs, from generic transactional systems like Salesforce to specific CRMs designed for venture capital and other financial services firms such as 4Degrees. Teams using generic transactional CRMs usually spend hundreds of hours on data entry and other manual tasks, so VC firms should consider a relationship intelligence CRM.
We at 4Degrees are tackling these challenges head-on by building a relationship intelligence platform with relationship management + deal flow management in one platform.
4Degrees is designed explicitly for deal-driven teams like venture capital, so we understand the workflows and nuances of VC and private equity teams.
Notion / Coda / Airtable / Evernote / Dropbox Paper: To create, categorize and search for notes. For example, suppose a colleague is conducting due diligence on a startup. In that case, you and other team members want to easily access those notes so you can all collaborate and share information without spending hours searching for handwritten notes.
Calendly / MixMax / X.ai / Clara: These products are a timesaver, allowing you to quickly coordinate and schedule meetings without going back and forth via email.
Zoom / UberConference / Hangouts: much of the job at a VC fund involves calls and meetings (pitch meetings with entrepreneurs, diligence conversations, team meetings, networking, recruiting…). There are dozens of other applications in this category, but these seem to be the three most popular in our experience.
Portfolio Management Software
Carta / Pulley / Captable.io: These platforms help fund managers keep track of cap tables, equity plans, accounting, administration, share data with limited partners, etc. Taking care of all these administrative tasks allows your team to spend less time tracking numbers and more time making investment decisions and supporting portfolio companies.
Pitchbook (or Crunchbase): Currently, the best data sources around what investments have been completed, by whom, and on what terms. Seed deals or early-stage deals done by angel investors are increasingly happening without press releases or much public fanfare, so these data sources are less comprehensive — but are still the best options.
CapitalIQ: An excellent resource for public company valuation data, making comparables analysis easier. Capital IQ has very comprehensive reports investment teams can use for established markets when conducting research. Plenty of other market research sources can also be leveraged, depending on the firm’s budget (e.g., Euromonitor).
Industry content: Staying abreast of new deals that have happened or the recent articles that are making the rounds is crucial for VCs. Pro-Rata + Term Sheet does an excellent job nationally, and each city likely has local publications. Twitter and Threads are also excellent ways to keep a pulse on the specific industries your firm is investing in. Many will use Feedly or a similar RSS reader to keep track of blogs — but the social curation of Twitter may be more effortless at this point.
Company Popularity Data Sources
There’s a wide range of these, but all generally with the purpose of trying to identify companies that are growing rapidly (or have the potential to do so):
- Customer Reviews: G2 Crowd — see also TrustRadius + Capterra
- Employee Reviews: Glassdoor
- Employee counts: LinkedIn, SourceScrub
- New products: ProductHunt, BetaList, Angellist
- Traffic analysis: Alexa, SimilarWeb
- Consumer spend: SecondMeasure
- Mobile app trends: AppAnnie, Apptopia, SensorTower
- Technology usage: G2 Crowd + Siftery, StackShare, BuiltWith