As a result, the days of VC investors spending all day at long conferences is no longer the future. Instead, through software and online social networking platforms, firms may reach farther and wider than ever before in the search for the next great startup. With so many new startups today, narrowing down these options is a crucial component to having an efficient firm deal flow. Harvard business review
states that " on average, out of 101 opportunities… only one will actually be funded." and that "A typical deal takes 83 days to close
, and firms reported spending an average of 118 hours on due diligence". With such time-consuming processes for deciding on investment and so many companies to sift through, seeking modern solutions to revolutionizing deal flow is undoubtedly the way to move forward if a firm wants to maintain a competitive edge. Using CRM software could decrease huge amounts of time used on things like due diligence
as it would be far more collaborative and allow those analyzing a potential investment to reduce redundancy by building off each other's insights. Additionally, suppose only a handful out of every 100 companies even makes it to the due diligence step of deal flow. In that case, it is essential not only to determine companies suitable for investment efficiently but also to remain organized in getting there by keeping all the firm's research data within a single system. Every hour taken off such processes and each redundancy eliminated eventually adds up over time and can significantly shorten a company's deal flow process compared to its competitors.
As a result of such benefits, a majority of companies are digitalizing their deal flows through intelligent software systems. This is partly because currently, "73% of employees spend between 1-3 hours looking for a particular piece of information". Fortunately, such wasted time can be eliminated with a CRM platform that is capable of organizing a myriad of VC information in one place.