Venture capitalists (VC’s) understand that their advantage lies in discovering opportunities before their competitors. Many of them have invested in AI startups, and are adopting the technology themselves to gain a competitive edge in their own investment decisions. The main reason is AI’s ability to recognise patterns in data and predict an outcome.
A survey conducted by Harvard Business indicated that 70% of deals made by 900 VC’s surveyed came through connections in their network. But most VC’s are unaware of the hidden opportunities in their existing ecosystem. They spend every waking hour looking for the next ‘big’ thing, constantly meeting entrepreneurs, and reviewing pitches and proposals. Managing and keeping track of so many relationships can be incredibly difficult and cumbersome.
Here is how relationship intelligence can improve deal sourcing and screening for VC’s.
Automate the search process
With the processing power of AI, VC’s and their teams can conduct searches and access/ analyse in-depth data in seconds instead of hours or even days.
The platform will also maintain up-to-date information on relationships, and with this key information centrally stored and well-organised, VC’s can establish a relationship network for their firm to serve as a ‘single source of truth’ and promote ‘firm-wide transparency’.
Sourcing deals more effectively
Building and nurturing relationships through your personal and professional network is the first step to sourcing quality deals.
Mitibase’s platform captures data from different communication channels (emails, text messages, etc.) and from external sources (news, social media, company websites etc.) into one central database, which allows VC’s and their teams to eliminate communication silos. They can also set up reminders to ensure that nothing falls through the cracks.
By relying on a deeper layer of relationship insights, VCs can intelligently scan their personal and professional networks for lucrative referrals and generate warm introductions at their target companies. They can identify who knows whom, and leverage the strongest relationship to the most relevant individuals.
Enhanced due diligence
Before making an investment, VC’s need to be made aware of the implications of engaging with an organisation. They not only need to identify potential risk at the onboarding stage, but also monitor for change on an ongoing basis.
With targeted insights into potential business relationships, they can uncover the relationships between key decision makers in the organisation and others in the marketplace. Create a watchlist of startups with future potential.
Venture capitalists turn down many potential investment opportunities, however promising they might be, because the timing might not be right. And with so many deals and prospects in their pipeline, it can be easy for VC’s to forget to follow up with a key relationship.
Mitibase’s platform can maintain a separate watchlist of these startups, record all the interactions since the first contact, and continuously monitor their activity in the market (for e.g, changes in the leaderships, new customers, etc) as well as the changing signals in the market (for eg, new valuation, new funding rounds, etc.). With these insights, VC’s can quickly develop a connection with a firm they might have previously passed on, but now presents a valuable investment opportunity.
They can maintain or improve the effectiveness of their network for new business development initiatives by keeping a track of existing relationships and nurturing them, or taking proactive measures to strengthen the waning ones.
Empower your portfolio companies
VCs provide value to their portfolio companies beyond the initial investment — they provide expertise and governance. But for their portfolio companies to grow and scale, they need to provide them access. This involves introductions to key decision makers.
So it’s more important than ever for VC’s to prioritise growing and maintaining their networks, while keeping a close on key relationships. Top performing VC’s go the extra mile and monitor the networks/ relationships of their portfolio companies.
In this aspect, a platform like Mitibase can prove to be highly invaluable to both VC’s and its portfolio companies. That is because standard CRM platforms focus on building pipelines, and not on relationships.
Get started with Mitibase
A VC’s network is their most valuable asset. Building, maintaining and nurturing a strong network can be the difference between making that next investment and losing a promising opportunity. Secondly, in the competitive world of venture capital, time is of the essence and they need access to crucial data at their fingertips.
Mitibase’s relationship intelligence platform provides dashboards and network diagrams that can help VC’s visualise relationships, see who can connect them with parties of interest, and how strong those relationships are. The platform leverages AI and automation to simplify complex workflows for optimising deal sourcing, thereby increasing profitability and investment returns.
Looking for more information on how you can close deals faster? Get in touch with one of our team members to book a demo.