The following is a Q&A with our Customer Success Team around what a VC Firm using Copper should consider.
How will a VC Firm use leads, people, companies and/or opportunities?
Generally, a Venture Capital Firm will primarily utilize the people, company, and opportunity record types. People and company records will be used to manage the various relationships and touchpoints that a VC Firm will have with their network of contacts. Copper can be used as a shared repository of knowledge for your network, as well as document the last email or activity that your team had with and relationship.
VC Firms may not necessarily choose to use the lead record, as it may not be critical to separate your relationships or companies into different sections within Copper. We typically see that VC Firms want to maintain all contacts together, segmented by 'Contact Type.' That said, leads may be used to separate any companies or contacts that your team has not yet connected with or been introduced to.
How will a VC Firm structure it's pipeline?
A VC Firm will often have different types of relationships being managed in their CRM, and you may need multiple pipelines. There are various use cases for tracking opportunities through a pipeline, or really, any repeatable process for your firm. Let's look at some example pipelines below:
Let’s say you want to track the progress of any potential investment by your research team. Opportunities will represent either ideas or companies in which you may want to invest. Using a pipeline, you can track your funnel of investments. Your pipeline could look something like:
- Broad Research - you might store many potential investment ideas in this stage with the intent to narrow down your research to your best ideas or investment opportunities.
- Preliminary Research Memo - as your research team beings initial research, you might move them to your next stage as you begin the formal process of evaluating companies or ideas.
- Due Diligence/Financial Analysis - at this point, your investment committee may choose a select number of ideas to actually pursue and begin due diligence. This can serve as a holding stage as the diligence process may be quite lengthy.
- Meeting/Follow Up - if a potential deal progresses to this stage, you may want to begin in-person meetings with representatives or investor relations contacts from the end organization. Deals in this stage certainly represent investments that may end up in your portfolio.
- Legal/Compliance Review - as you your potential investment continues to move forward, you may want to have a stage that allows you to report on what investments are now up for legal review from your team.
- Investment Memo - this may represent a completed deal and you team’s final internal investment memo recommending and finalizing the investment.
Raising a Fund / Vintage
You can leverage a pipeline to track the progress of potential investors as you raise a fund or vintage. This can be particularly useful as a tool to manage and track subscription, legal and AML documents, and ensure that your investors have successfully funded their investment. You pipeline might consist of the following stages:
- Indicated Interest - you may create opportunities for any interested individual or investment entity that expresses initial interest in making an investment with your firm.
- Initial Allocation - once you’ve finalized initial interest, you can identify which investors have been accepted into your initial allocation, and progress them to the next stage of the pipeline.
- Subscription Documents Received - as your team begins to release subscription materials to your investors, you’ll want to track for which investors you’ve received completed subscription documents.
- Awaiting Legal/AML Documentation - for any investors with outstanding AML or legal documentation, you’ll likely want to create a separate stage, so you can identify the investors who you’ll need to follow up with to collect required documents to finalize their investment.
- Final Allocation
- Subscription/Funds Received - this will likely be the last stage so that you can track which investors have successfully funded their initial investment in the round or fund.
For your business development team, you may want to use a pipeline to track how your team is building connections or expanding your network of relationships. Your pipeline may look like a traditional partnerships funnel:
- Initial Outreach
- Confirmed Interest
- First Meeting
- Second Meeting
What custom fields should a VC Firm add to records?
For investments/potential investments:
- Geography (dropdown)
- Sector/Industry (dropdown)
- Company Size (segmented by dropdown options)
- Funding received (series A, B, etc..)
- Related Investors (connect fields)
- Relationship type (multi-select)
- Portfolio Size
- Estimated Net Worth (dropdown)
- Investor/Entity Type (dropdown: Individual, Trust, LLC, LP, Family Partnership)
- Domicile (for AML purposes)
What reports should a VC Firm pay attention to?
View the Pipeline by stages with the 'Pipeline Summary Total' report
'Activity by User' (Professional and Business) is also helpful to see how users are spending their time and which efforts are most successful.