september, 08 / 2022 by Karina Collis and Zachary Weiss

Choosing the Best CRM for Venture Capital
[+ 5 Top Picks for VCs]

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.

What is a Venture Capital CRM?

Venture capital CRM is a type of software that helps venture capitalists to track their portfolios, identify new investment opportunities, connect with startup founders and other investors, and access deal flow information. There are many different types of CRMs on the market, each with its own unique set of features and benefits, so it is important to choose one that is right for your firm.

If you are looking for a Venture Capital CRM that is both easy to use and customizable to fit the needs of your business, check out Dialllog in action.

Benefits of Using Venture Capital CRM

Venture capital doesn't have linear transactional relationships like product-based industries—which most CRMs favor. That's why Venture Capitalists need CRMs specifically created for building collaborative relationships over many years.

Here are some of the benefits of using a CRM for Venture Capital:

  • Helps you keep track of your investments and performance
  • Enables better organization and management of your venture portfolio
  • Provides valuable insights into your ventures' progress and health
  • Helps you manage risk by identifying early warning signs of trouble
  • Makes it easier to raise additional funding
  • Helps you build and maintain strong relationships with your portfolio companies
  • Improves your chances of success as a venture capitalist overall

    How to Choose the Best CRM for Venture Capital?

    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.

    Most of the VC-centric CRMs out there only focus on one aspect of venture capital, e.g., deal flow. This tunnel vision leaves Venture Capitalists managing countless spreadsheets, lists, and disparate systems, leading to inefficient workflows and more human error.

    But there's a better way - using Venture Capital CRM that can cover your entire investment lifecycle with features that are actually useful.

    Here are the 6 features to look for in the best Venture Capital CRM:

    1. Deal Flow Management

    Knowing which companies are ripe for investment is crucial for VCs, making deal flow features a must.
    A good venture capital 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 investor 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.

                5 Best CRMs for Venture Capital Funds

                There are a number of different CRMs that venture capitalists use to help manage their funds. Some of the best ones include:

                1. Salesforce

                Salesforce is one of the most popular CRM software that offers a comprehensive package of tools for managing venture capital. It enables Venture Capitalists to manage their pipeline, track performance, manage relationships with investors, keep track of fundraising progress, and manage deal flow.

                Salesforce Venture capital CRM also includes features specifically designed to help venture capitalists make the most informed investment decisions possible.

                Key Features:

                Investment management: This feature allows VCs to track their investments, performance, and portfolio composition.

                Portfolio tracking: It gives VCs visibility into their portfolios, including positions, valuations, and recent activity.

                Contact management: It helps keep track of the contacts, including investors, entrepreneurs, and other venture capitalists.

                Analytics: Salesforce also provides powerful analytical tools to help VCs make informed decisions about their investments.

                PROS:

                Long history within the CRM industry, has a training program, has an email integration system.

                СONS:

                Does not cover the investment life cycle, bad activity entering the experience, very expensive and difficult customization, and bad mobile experience.

                2. Pipedrive

                Pipedrive is a cloud-based CRM software that helps venture capitalists and startup companies keep track of their investments and business deals. It offers a visual pipeline tool that helps VC investors see the status of their deals, track progress, and forecast sales.

                Key features:

                Deal tracking: You can track your Venture Capital deals, progress, and performance with Pipedrive. This feature allows you to see which deals are hot, cold, or won. You can also see the value of each deal and the expected close date.

                Contact management: Pipedrive CRM allows you to add new VC contacts, edit existing ones, and track their activity.

                Financial management: This feature allows Venture Capital investors to see their investment portfolio, and track their expenses.

                Reporting: Pipedrive CRM for Venture Capital allows you to see your progress, performance, and finances. Reports can be exported to Excel or PDF format.

                PROS

                Includes integration with other apps, has a mobile version, reports data.

                СONS

                Does not cover investment life cycle or activity notes, many bugs, lackluster collaboration features, no search feature in files.

                3. Affinity

                Affinity is a venture capital CRM software that enables you to keep track of your portfolios, performance, and investments. It allows Venture Capital investors to manage their entire venture capital operation in one place and provides them with the tools they need to make informed decisions and optimize workflow.

                Key Features:

                Affinity offers a suite of features specifically designed for venture capitalists, including a deal room, due diligence management, and investor relations management.

                It also provides a social network for connecting with other venture capitalists and investors.

                PROS

                Insightful analytics on top of your mailbox, google extension and data enrichment

                СONS

                Hard to find any information because of limited search functionality, limited note-taking experience, messy data because of the full mailbox synchronization, bad mobile experience, very expensive.

                4. HubSpot

                Hubspot has built an excellent reputation for its myriad of marketing, sales, and CRM tools.

                Hubspot's venture capital CRM helps investors and small businesses manage their finances and track their progress. It provides insight into how much capital is being raised, what stage of funding the company is in, and what milestones have been achieved. This information is useful for both investors and entrepreneurs, as it can help them make informed decisions about where to invest.

                Key Features:

                One of Hubspot's CRM key features is the Customer Portal which allows venture capital investors to get information whenever they need it. By giving them a window into their company's operations, investors can solve problems on their own which builds transparency and trust.

                Another great feature of this VC CRM is its ability to help track and manage your sales pipeline. This can be critical for any business, but especially venture-backed startups who often have a lot of moving parts and need to keep track of their progress (and potential investors) at all times. Hubspot's software makes it easy to see where each deal is in the pipeline and what needs to be done to move it forward.

                Additionally, it can help Venture Capitalists track their customer relationships. By tracking interactions and keeping notes on customers, Hubspot makes it easy to build and maintain strong relationships.

                Finally, Hubspot's reporting features are unmatched. This can be helpful for any business that needs to track its progress and performance over time, but is especially useful for venture-backed startups who often need to report their progress to investors.

                PROS

                Has a generous pricing model, onboarding system, extended integration with other apps

                СONS

                Does not cover investment life cycle, basic note-taking functionality, basic workflows

                5. Dialllog

                Dialllog is the project-based Venture Capital CRM software designed specifically for VC funds to manage their entire investment cycle. It brings all the sporadic information into one place to create data-driven workflows and is the only CRM for VC that can cover the entire workflow.

                Dialllog introduces a completely new approach to digitalizing Venture Capital workflows, not just the sourcing pipeline. By bringing all of the VC-related activities into one place, it completely removes information silos.

                It allows Venture Capitalists to stay on top of all the existing and future deals, co-investors, LPs, advisors, and much more.

                PROS

                Covers full investment life cycle, superior note-taking experience even from your mobile, has email integration, deep search through data and files attached, allows to manage projects and other tasks.

                СONS

                Latest to the market.

                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.

                What is Dialllog?

                Dialllog is the first project-based Venture Capital CRM software designed specifically for VC funds to manage the full investment cycle.
                No more endless Excel spreadsheets, docs, notes and emails. Dialllog brings all the sporadic information into one VC software to create data-driven workflows.
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