september, 08 / 2022 by Karina Collis
Choosing the Best CRM for Venture Capital: 6 Must-Have Features
VCs need tools for building collaborative relationships over many years. Most of the VC-centric CRMs only focus on deal flow leaving VCs managing countless spreadsheets, lists, and disparate systems, leading to inefficient workflows and more human error.
Best Venture Capital CRMs have the power to simplify workflows, reduce admin time and help you foster better relationships. Consequently, Dynamic Consultants Group estimates the ROI on this software to average 30x spend. However, not all CRMs are equal.

Venture capital doesn't have linear transactional relationships like product-based industries—which most CRMs favour. Instead, VCs need tools for building collaborative relationships over many years.

And the VC-centric CRMs?

Most of them only focus on one aspect of venture capital, e.g., deal flow. This tunnel vision leaves VCs managing countless spreadsheets, lists, and disparate systems, leading to inefficient workflows and more human error.

There's a better way.

Try using specifically created CRM for Venture Capital that can cover your entire investment lifecycle with features that are actually useful.

Here's what a great venture capital CRM should include:

1. Deal Flow Management

Knowing which companies are ripe for investment is crucial for VCs, making deal flow features a must.
A good deal flow management will give you an overview of the companies you're currently analyzing and investing in. It should let you customize your deal flow processes and categorize them for easy navigation.

For example, the European B2B tech deal flow below covers a simple six-step process.
This setup allows you to:
  • See the progress of a startup at any time.
  • Easily click and drag their icon across the flow as they progress.
  • Dive deeper into a company with a single click

Some other crucial deal flow management features include:
  • Scores or rankings for each opportunity so you can focus on the most promising companies. For example, you can rate the business model, team, financials, and many other factors.
  • Displaying critical details about each company, such as their primary contact, investment details, and last interaction details.
  • Company-specific deal flows that capture relevant activities, conversations, and more to give you deeper context.

2. Venture Capital Metric Tracking

Tracking different venture capital metrics gives your firm a snapshot of its performance and the performance of individual companies within your deal flow as well as portfolio portfolios.
You should be able to easily upload KPIs to the CRM or send a request to a startup to pre-fill KPIs on their end.
Using this information, you can choose the next best steps for your firm.

Besides traditional metrics, it's become increasingly important to track environmental, social, and governance impacts for both, potential investment targets and portfolio companies. Consumers and governments are placing greater value on socially-friendly companies, meaning investors will need to as well.

Some ESG metrics to consider tracking include:
  • Energy use.
  • Greenhouse gas and carbon emissions.
  • Involvement in social programs.
  • Regulatory issues.
  • Waste creating and sustainability.
Having a clear picture of key metrics will help you better analyze risks and growth opportunities for your firm.
In Dialllog you can find templates to track ESG metrics.

3. Relationship Databases

Relationships make the VC world go around. It's where you find leads, deals, and investors and learn about industry news and trends.
Best CRMs should allow you to keep track of relationships with industry experts, VCs for syndicate deals, advisors and many more. It allows easy access to the right counter parties when you need them.
Relationship projects allow you to keep track of all your relations with people and companies from your ecosystem.

4. Due Diligence Hub

Ineffective due diligence can cost your firm and its investors millions of dollars and countless hours of wasted time. That's why you must have a simple, repeatable due diligence flow.
Your flow should cover the processes for each department, e.g., finance, legal, and HR. From the hub, you should be able to see the progress of each task and who's in charge. Visualization capabilities, e.g., Gantt charts, are also helpful as they make it easier to gauge progress and deadlines.
Due Diligence project in Dialllog allows you to keep an eye on every task and on who's in charge.
Your due diligence flow should:
  • Be a single page where you can track progress, manage tasks, and collaborate with stakeholders.
  • Show your progress at any time so you can identify bottlenecks.
  • Give you access to information like recent dialogs, shared files, and emails related to the company.

5. Investment Management

Once a startup makes it through your deal flow process and receives an investment, you'll need a dashboard for communication with your portfolio companies. It will allow you to centralise all the board meeting notes in case you hold a board seat, different projects you help your portfolio companies with as well as following fundraising and exit strategy conversations.

Here, you should be able to track deal flow of all relevant interactions with your portfolio company, co-investors, consultants, and other stakeholders. You can also set up sections for future threads, such as the next investment round.

You should be able to view key company metrics—like in your portfolio overview—and customize your dashboard to contain any information you need.
In this example, you can see threads related to each topic, i.e., board meetings and product launches. The dashboard also includes relevant contacts and milestones for the investment.

6. Overview Investment Dashboards

At certain times, it's crucial to have a holistic view of your investments. Two must-have dashboards include a portfolio overview (similar to the one we shared above) and company overviews.

Your VC portfolio overview should:
  • Cover vital metrics that show you the health of an investment.
  • Let you give LPs access to their investments' metrics.
  • Provide visualizations so you can compare different companies in your portfolio.
While a portfolio overview covers the big picture of each fund, best venture capital CMRs should have company overviews focus on relevant information for a particular investment.

Company overviews should cover:
  • All communication history between the company and stakeholders from your firm.
  • Stakeholder contacts.
  • The same statistics that you see in your portfolio and investment management sections.
  • Recent financial performance.
  • Historical dialogs for each project you've conducted with the company, e.g., deal flow, due diligence, etc.
Dialllog's clear, comprehensive and flexible dashboard allows you to have a clear view of all the investments.

Bonus Features to Look For

The six features mentioned above are vital for earning a positive return on your CRM investment. But if you want to maximize your firm's productivity and profits, these are some other features to consider:
  • Powerful search capabilities: Surveys show that 73% of employees spend between 1-3 hours looking for a particular piece of information. Employees usually spend this time searching through emails, spreadsheets, written documents, and other disparate databases. However, a CRM with superior search technology can instantly search through any local information—for example, contacts, notes, attached files, emails, and more.
  • API integrations: In that same survey, 76% of workers said they spend 1-3 hours daily on data entry. API integrations let you pull data from any compatible system into your CRM. Your CRM should allow you to pull data from emails, calendars, Crunchbase, LinkedIn, digital forms, and more, saving your team countless admin hours.
  • Clean UI: A clean user interface makes navigation easier and prevents you from having information overload. It also helps you remember where information is stored, keeping productivity high.
  • Customization: While most VC funds have similar high-level processes, the details are often different. That's why you should be able to customize every dashboard, so it contains the information and flows you need. You should also be able to customize privacy permissions—for example, access to a sensitive investor conversation. Rather than bend to the CRM, make the CRM bend to you.
  • Automation: Automation reduces unnecessary admin, giving you more time to focus on high-value tasks, like relationship building or deal sourcing. You should be able to automate things like rejection or acceptance messages, statistical updates, and reminders.

So, What's the Best CRM for Venture Capital?
Most CRMs don't match the Venture Capital industry's needs for long-term relationship building, investment management, and collaboration. That's why you must have a Venture Capital CRM software solution that covers the entire investment cycle—from relationships and deal sourcing to management, due diligence, and more.

That's why we created Dialllog, the best CRM for Venture Capital on the market that digitizes every area of the VC lifecycle, giving you a single, centralized source of truth. No more back-and-forth between colleagues or hours spent finding a data point. Instead, it's all just a few clicks away.

Want to see how Dialllog combines all your VC needs into a set of clean, intuitive dashboards? Book a live demo with our team today.

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