Quick thoughts today - I've been talking to a lot of VCs recently, and was surprised to find out about a major pain-point shared: purpose built tools. 🛠 (Some research shows some exist 😅, but are apparently not widely used yet.)
On second thought 🤔, it makes a some sense. There are only 1000 VC firms in the US, and maybe a handful more angel investors - so you can imagine the total number of potential users would be quite small, even globally. This also isn't a Bloomberg Terminal situation - VCs don't really need these tools enough to justify paying large enough subscriptions to make it profitable. Though, Crunchbase does exist 🤷🏻♀️ ...
So I don't expect any sort of real startup to exist in this area, but I could see a set of open source tools built by the community, or by a smaller startup. Some government/startup communities are building tools that soft of touch on the periphery of this.
Ok, on to the tools/features
Data driven decision making 📊
- Increasing deal flow data, e.g. scraping connections made on Linkedin by other VCs 🗂
- Surface data 📈: industry data, scraping Twitter and FB for word of mouth deals
- Dynamic filters - based on NLP etc.
- Dealing with data: scaling and hacking where sample sizes are small, or ambiguity is high❓
Deal flow and process management 📨➡️
- Plug into Twitter and other promotional places 📣
- (Bonus: ability to share deal flow with other corporate arms/student VC teams) 🌏
- Track deal on investment process
- Decision making conciliation and tracking - Bridgewater-like tools to help make and track decisions
- Post-cheque tracking and management - included rejected startups, to see how to improve and reflect on issues ✍️
- Relationship 🤝 management - NLP/data to analyse relationships with portfolio
- Team/collaboration tools 👩🏻💻👨🏿💻
Sharing deal-flow + LP control 🔐 and access + MFA/2FA
- With the rise of new VC funds and VC-as-a-service, it would be prescient to realise LPs sometimes want to see deals as well
- Sharing with other VC firms, dealflow better suited to them
The upside to this
The upside to the conversation, is that there seems to be a growing consensus that VC game is becoming less dependent on connections, and more about making good decisions and helping the portfolio. The data is out there - not tidy, not centralised or necessarily apparent, but it is out there. That's a huge thing!
It's a hopeful flag towards a march towards increased diversity 🏳️🌈👨🦽 in VC and startup founding.
The march towards democratisation: open source resources
Other than a set of useful tools, there are a couple other things we could consider moving ➡️ towards. Only when we reach transparency, do we allow investors to make better decisions. And only when investors can make the best decisions, do they best allocate capital to drivers of growth and innovation in our society 🚀. By sharing approaches to encourage and guardrail change, can we make progress occur.
- sharing ↔️📩 data between VC firms and investors
- standardised term sheets
- open source incubation and acceleration programmes 👍
- pooling mentorships and resources 👩💼👨🏽💼
- open source regulation re: new technologies and new business models 👨🏾⚖️