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Venture Capital investors usually have too much on their plate – monitoring the performance of portfolio companies, providing direct support to founders, identifying the best investment opportunities, fund administration, and many more. With increased portfolio companies comes an increased amount of workload. Let’s find out which steps in the process are taking resources, efforts and valuable time from your VC team, and why you should care about the productivity within your VC team.
Fund managers often request their portfolio company for reports and KPIs every month or quarter. The most common method is through spreadsheets and back-and-forth emails. Even though this method sounds so hands-on to many at first, it’s barely sustainable in the long run. The bigger your portfolio gets, the more hours and resources are taken from you to maintain it.
With all the report format and metrics which vary from company to company, there’s a ton of business data scattered all over spreadsheets. As a consequence, aggregating data at the fund level becomes more painful. Whether you have too much data, or it’s scattered across spreadsheets, or you’re manually putting all data together, you’re not alone. VC teams globally are struggling too.
VC team will have to calculate by hand plenty of fund performance metrics, namely ROI, multiple, IRR, etc. to measure their investment performance. However, manual calculation is error-prone, there’s still a chance that you encounter mistakes that cause unnecessary confusion and misunderstanding in your team. If you don’t have the right figures or can’t get the right judgments from the data you have, you’ll likely take wrong actions, distract focus areas and lower team productivity significantly.
Before diving deeper into the solution and how to fix it, let’s look at why you should care about your VC team’s productivity in the first place.
When you streamline your process, you’ll have more time to focus on what matters. To enable this, you need to start automating your workflow and renewing your process.
From data-driven to insights-driven
Having the right data isn’t enough—you also need the right analysis and actionable insights to act upon.
It’s not difficult to see how better insights, in less time, will lead to prompt actions. In hindsight, what happens is that you make better decisions, lower costs, and ultimately, focus on things that bring greater value.
These days, more VC teams are realizing that their spreadsheets and emails aren’t keeping up with the times. They will be likely to be buried in tasks unless they adopt a portfolio management tool to tackle all manual work. So if you want to improve your reporting infrastructure, eliminate the manual process and minimize wasted efforts, let’s look deeper into the solutions in this article.