According to PitchBook data, there are about 15,700 venture and corporate venture funds globally, out of which 8,628 venture capital funds in the US alone (54%), and another 4,553 in Europe (29%), not counting accelerators in both cases. The growth in the number of funds (and dollars available) and companies, has made VC funds an attractive market for SaaS products.
The private companies in this survey raised over $2.75 billion in venture capital (According to PitchBook data). Not all are venture-specific and Slack is an outlier, but similar to “startups selling to startups”, startups selling to VCs is a growing segment.
The use of technology by funds therefore extends to all parts of the business. Some use cases are specific to VC (like dealflow management and cap table related resources), and other use cases are similar to any other small business (communication tools, payroll, etc).
To outline the VC tech stack VC Cafe reached out to the venture community in Europe and Israel with a survey. The results below are based on 90 responses.
Spreadsheets remain the top form of managing dealflow. This primarily refers to deal tracking and note taking and in some cases doubles as a CRM. As for dedicated tools, it’s pretty close between Salesforce, Trello, Pipedrive and Slack.
Portfolio management and cap tables
As funds grow, so do their portfolios and it’s gets trickier to keep track of cap tables and update progress (or lack thereof). Interestingly, a lot of the replies in this category where in the ‘other’ section. Carta and and eFront are popular, but not ‘loved’.
The question related to internal communication, as well as external, between the fund and founders. While Email is inevitably the main form of communication, deals get done on messaging apps, especially WhatsaApp.
There’s quite a lot of overlap between the dealflow tools and CRM. Salesforce is the largest followed by Pipedrive. Several funds in the ‘other’ category mentioned Affinity and Copper. Other mentioned they’ve developed proprietary tools for this.
Where do funds source companies and learn about trends and competitors? The research category is a crowded space where quality and price varies. Crunchbase is a freemium product and the data is sometimes obsolete. Tools like PitchBook and CBInsights employ analysts to keep the data fresh, at a price. Several funds have built their own tools for discovering new companies and tracking founders. See previous post on how funds leverage machine learning and big data.
Scheduling/ Virtual Assistants
Relatively slim pickings in this category, despite the large number of meetings conducted by VCs in a given week. Calendly was a popular answer, though it’s possible that much of the scheduling is done the old-fashion way or with human assistants.
Board management/ finance/ recruiting
Most firms rely on traditional cloud sharing tools like Google Drive or Dropbox for the purpose of managing internal operations. Workable and AngelList are for candidate sourcing both internally for the fund and in some cases for portfolio companies.
Exit related resources
Calculating multiples, selecting comps and setting benchmarks are needed in the exit period of the fund as the portfolio matures. PitchBook tops the list.
Partial participant list
Fund name was optional, below is a sample of some of the participants.
- Kibo Ventures, €114M3 days ago
- Speedinvest, 250M AUM
- TriplePoint, £1.3bn AUM (£40m venture)
- Pi labs, $10m
- Consensys Ventures, $50m
- Meron Capital
- Vector Venture Capital
- MMC Ventures, $350m AUM
- Kreos Capital
- Sky Ocean Ventures, £25M
- Credo Ventures EUR 170m
- Burda Principal Investments
- Ascension Ventures
- Runa Capital, $300M+
- Black Pearls
- GR Capital, $30M
- Ring Capital
- Breed Reply
While the process of venture investment changed relatively little in recent years, the adoption of technology is rapidly increasing. Many funds regard this data as confidential, and a lot of the tech resides in proprietary tools, especially on the sourcing/dealflow management side. Other categories that weren’t included are marketing software (blog, newsletters, etc), news monitoring, expenses management, etc.
For a high resolution version of the VC tech stack landscape, click here.