Common CRM Mistakes Small VC Funds Make
This article was written prior to the Edda’s renaming, formerly Kushim.
Hello everyone. I’m Alexandre, co-founder and COO at Kushim. My job is to answer the pain points of venture capital firms. I meet many VCs that consider themselves too small to use a venture capital CRM tool. However, in the following article, we will discuss how this decision will cause issues for your fund.
THOUGHT PROCESSES THAT WILL SET YOU UP FOR FAILURE
1) You believe that using email, WhatsApp, Dropbox and Excel is enough for your small team to manage all the deals.
All too often, small teams have more deals than they can handle. In the absence of a central tool, you will lose track of the startups you meet. As a result, you may take unnecessarily long to reach out to founders and your follow-ups will be less proactive.
With a process like this, the number of startups you can screen will diminish. This will directly impact the number of investments that you do.
If you find your time stretched too thin, it is likely the result of dedicating too much to administrative tasks.
2) You believe that investing in a CRM solution is expensive.
There are always better way to spend your management money, right?
The primary goal of VCs when searching for a CRM should be “what’s the value I am going to get out from this”.
A dealflow CRM or a software for VC replaces several tools you are already paying for. At Kushim, we measured the impact of using a CRM with different VC firms across the world. It appeared that the annual cost of our software is amortized in less than a month. That’s why I strongly recommend to focus on value rather than the expense incurred.
3) You think the process is not relevant yet
Setting up a process in your company ensures clear communication, team work and pushes you faster towards your goals.
Along the time, we had the opportunity to work with many VC firms that were using only spreadsheets. Until they said STOP, there must be something that could help us manage our deal flow easier. Now that they have a centralized data base, they can automate many tasks such as:
- Data entry from email, Crunchbase, submission forms
- Preparing powerpoint presentations for partner meetings
- Task follow-ups
- Export a profile of a company and share it with a peer investor
- Real-time statistics of their pipeline
The main pickup from this article is that you should focus on value. The rest isn’t worth your time.
Thank you very much for reading. If you would like to know more about our deal flow CRM for VCs solution click here.
