VC workflows

Welcome to a two-part series on VC stacks and workflows. Part one is all about the tools investors use to run a fund. Part two highlights the workflows investors use to move quickly and efficiently.

The best fund managers have a process for repeated activities, from deal flow management to diligence, powered by tools in their stack. This post includes input from 16 investors to highlight the diversity of approaches and a few very novel (AI-powered, of course) solutions.

If you only have a few minutes, here are some takeaways:

• Workflows should have a clear goal. Investors adopt workflows to save time, comply with a process, make better decisions, communicate with others, and more. Designing effective workflows start from understanding the goal and working backwards from there. It’s also possible to go too far with workflows, where the cost of maintaining and adhering to them outweighs their actual value.

• The best workflows align with the fund’s strategy. Like many things in venture, the most successful investors lean into their unique strengths, and workflows often reflect that. For example, at Weekend Fund we are heavily focused on collaborating and sharing deal flow with other investors to align with our fund size, brand, and community building experience. We’ve built workflows to do this more efficiently.

• More funds are using AI in their workflows. Tiny VC uses Azava to generate AI-powered deal summaries, DVC uses AInalyst to extract the information they need from company materials, and Untapped Capital built BabyAGI and other tools to automate their work

Shoutout to Andy Chung (Tiny VC); Ariana Thacker (Conscience VC); Ben Tossell (Ben’s Bites Fund); Bryan Rosenblatt (Craft Ventures); Eric Slesinger (201 Ventures); Jeff Morris Jr., Dakota Torres; Lauren Hill; and Doug Dyer (Chapter One); Daniel Rumennik (AirAngels); Leo Polovets (Susa Ventures); Mark Scianna (Forward Deployed VC); Matt Hartman (Factorial); Nick Davidov and Marina Davidova (Davidovs Venture Collective); Vijen Patel (81 Collection); and Yohei Nakajima (Untapped Capital) for contributing.

Deal flow workflows

Managing deal flow and moving opportunities through a pipeline is a core part of the investing game.

Deal flow workflows typically center around a CRM which serves as the source of truth and “router” for other workflows as information is pushed into and out of the CRM at different stages. For example, a new email might push a new entry into the CRM and a change in that entry’s status might push updates out to Slack.

When designing deal flow workflows, fund managers prioritized:

• Integrations between the CRM and data enrichment sources like LinkedIn, Crunchbase, Product Hunt, and others
• Connectivity between the CRM and other tools to automate steps in the process
• Using flexible no-code or low-code workflow builders like Airtable to give everyone access to update and trigger actions

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How Factorial Capital manages their deal flow

"Our principle for CRM is that it should both store data and act as a co-pilot with simple automations and connections to make our workflow more efficient. It should never create additional work for anyone outside of the core Factorial team. Our goal is to make ourselves more efficient, not to productize the work that we do. As a result, the end of any automation that is externally facing is often a draft of an email or information designed for us to consume internally. Right now we use Airtable as our back-end and nearly everything we do begins in an Airtable Interface.

On the database side, our atomic unit is People. We keep detailed records of the entrepreneurs, operators, VCs, and LPs we know. That informs all other data, whether it’s populating pitch data, making intros between potential investors or acquirers, or just reaching out to people when we’re in town.

Airtable can take a while to load and it’s a lot of clicks to get to their ‘interfaces’ page (which aren’t yet supported on mobile). So for quick answers, we have GPT-4 and LangChain hooked up to an export of our people and pitch tables. That way we can get deep specific data quick."
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— Matt Hartman, Factorial Capital

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How Craft Ventures manages their deal flow

"Deals automatically get pushed from Harmonic to Affinity, where they can be claimed by investors (investors can also manually add deals for companies they meet organically). Affinity helps track relationship owners and deal statuses."
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— Bryan Rosenblatt, Craft Ventures

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How Susa Ventures manages their deal flow

"Affinity is our CRM. We like it because it automatically pulls in data from Crunchbase and tracks recent emails and meetings between us and companies we're talking to."
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— Leo Polovets, Susa Ventures

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How Tiny VC manages their deal flow

"Historically, extensive deal flow tracking was not necessary for Tiny, since we move fast and are a small team.

Recently, we started building a new tool, Azava, for managing our deal flow and sharing deals with potential co-investors. We simply forward emails and WhatsApp messages to the platform and it generates a summary of the deal. Azava’s AI agent extracts information from the message, including attachments (PDFs) and pitch deck links (e.g. DocSend or Google Slides), to produce a summary about the company, its founders, and the round. It will even try and find the LinkedIn profiles of the founders. It’s like having an intern write a short investment overview for every deal we receive. It’s still early days, but we think there are a lot of workflows that can be automated with the latest advances in AI.  

We’ve decided to make this tool available to other emerging managers. Here’s an example of what the output from Tiny’s workflow above looks like – from Transferwise’s 2011 Seed pitch deck:

— Andy Chung, Tiny VC

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How Forward Deployed VC manages their deal flow

"Pipedrive is our CRM where we manage contacts, outreach, and deals. We have one pipeline for investors and another for startups. It's simple to get started, the mobile app is handy on the road, and it integrates well with other systems. Best of all, email integration is fantastic. You can send personalized messages to multiple recipients, create deals from email threads, and see the last interaction dates across deals. If you are an engineer that comes from the world of scrum boards, Pipedrive’s interface will be a familiar UX."
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— Mark Scianna, Forward Deployed VC

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How AirAngels manages their deal flow

"We have a very basic workflow for managing deal flow, diligence, and communication. We mostly stick to both email and Slack when we're internally discussing deals. We'll hop on a zoom if needed, but typically a weekly zoom call is sufficient for us, and most of our communication is async. For inbound deals, one of us will typically chat with a company. We'll then share the notes of the call with the rest of the team over email or Slack along with a deck and feedback/opinion on how to proceed. We'll then go back and forth async over email or Slack to discuss and ask questions. Once we decide to invest, we'll update our Google Sheet tracker as the deal progresses to closing."
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— Daniel Rumennik, AirAngels

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How Untapped Capital manages their deal flow

"We have this workflow drawing that shows what happens when we ‘bookmark’ a website, which kicks off a bunch of workflows."
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— Yohei Nakajima, Untapped Capital

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How 201 Ventures manages their deal flow

"My deal flow and CRM is on a heavily modified and automated Airtable, designed to save me time on repetitive actions (I'm a solo GP). I built automations to make/log intros, send company descriptions, create one-page tearsheets of interesting companies, and track key metrics (e.g. average # days between learning about a company and meeting them). The database architecture is simple and works for all types of entries, and everything is linked with relations. I also built an Airtable Interface for the base that turns it into a hackier version of bookface for the 201 Ventures extended network. When I'm using the Airtable at night I turn on an Arc boost that makes it look like the matrix, because why not."
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— Eric Slesinger, 201 Ventures

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How Ben's Bites Fund manages their deal flow

"My flow works like this: When I come across a company (whether referral or outbound), I copy the URL and trigger an automation via Apple Shortcuts called 'Company Tracking' which takes the URL, then hits a Zapier webhook. The automation then parses the web page, pulls the HTML, writes a summary of the company with related tags, and puts it in Airtable under 'tracking' in my pipeline. I’m currently playing with an automation to populate social links, founders' info, etc. but in the meantime my assistant is doing this manually. Every week I review my pipeline and move companies through the list (initial review, connect to founder, call, evaluation, committing/committed, passing/passed)."
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— Ben Tossell, Ben's Bites Fund

How Weekend Fund manages their deal flow

"When we connect with a founder about their raise, Ida (EA via Athena) sends a calendar invite using Vimcal and creates an entry in Airtable that includes details about the company (name, URL, tagline, stage, and categories), founders (names, emails, LinkedIn URLs), name of the person that introduced us if applicable, and status. Airtable serves as a pipeline tracking tool and a CRM, where every entry connects with one another. After the company is added to Airtable, it triggers a Zapier zap to create a #deal-company-name channel in Slack where we add a link to the deck, share notes after a call with the founder(s), and discuss diligence. Once we’ve decided to offer to invest or pass, we collaborate on a draft in Front to send to the founder. If applicable, we also close the loop with the person that introduced us. Along the way, we continue to update the status of the opportunity in Airtable from ‘meeting’ to ‘diligence’ to ‘passing → passed’ or ‘committed → invested’."
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— Ryan Hoover, Weekend Fund

Outbound sourcing workflows

An outbound sourcing strategy helps funds reach outside their immediate networks, expand their coverage, and increase deal flow.

For outbound sourcing, funds typically scan (either manually or with an automated tool) startup information networks like Crunchbase, Pitchbook, etc. and/or networks such as LinkedIn, Twitter, Hacker News, reddit, or Product Hunt. The results are usually fed into outreach and follow-up workflows.

While designing their outbound sourcing workflows, funds prioritized:

• Scraping information on companies and feeding it into the deal flow CRM
• Using the CRM to orchestrate next steps once information on a company is gathered
• Building specialized tools to gather signals that surface companies to contact

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How Untapped Capital manages outbound sourcing

"For outbound sourcing, we look at Product Hunt, Twitter, startup events, accelerators, startup listing sites. We also have various Google Alerts set up and receive lists of startups from those that know we source primarily through outbound. Once we find a startup we like, we use our smart bookmarking tool to have AI kickstart basic diligence. We don't automate outreach, but rather write a short email or DM directly to the founder. We have tools to automatically identify relevant people, startups, and resources to each other. This helps us identify opportunities to help people in our network that we may not have thought of otherwise. We also built an investor/founder matching tool called dealflowdigest.com which has made over 130+ intros on auto-pilot."
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— Yohei Nakajima, Untapped Capital

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How Ben's Bites Fund manages outbound sourcing

"I do a ton because it’s the same flow for finding content for the newsletter, Ben’s Bites. We automated a bunch of this (with code) to pull info from Product Hunt, Hacker News, GitHub, Twitter, etc. I actually track a number of communities too (Buildspace, Founders Inc, HF0, etc.) for interesting projects and builders. I like to make sure I've included the company in my newsletter before I even reach out."
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— Ben Tossell, Ben’s Bites Fund

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How Forward Deployed VC manages outbound sourcing

"LinkedIn search and alerting for keyword ‘something new’, where I currently have 20 first-degree connections and thousands of second-degree, plus similar searches on faux companies ‘stealth’ and ‘stealth startup’, where I currently have 30 first-degree connections and thousands more second-degree.

Slack is also a great community tool for alumni and investor networks. I’m in nine such workspaces, and about half my deals last year originated from leads or contacts I first made on Slack. It’s easy to create Slack alerts for keywords you care about to ensure you don’t miss potential leads. I can then DM interesting leads on Slack and add them to my deal pipeline."
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— Mark Scianna, Forward Deployed VC

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How Conscience VC manages outbound sourcing

"In terms of channels and sources, we sometimes lean on LinkedIn and clever filtering when we do outbound sourcing. We have developed a fairly detailed outbound sourcing engine that keeps track of hundreds of sources relevant to us, developed internally, which we call ‘Queenie’. However, we've had the highest yield via inbounds (our ‘Conscience Goodie Bag’, LinkedIn, etc) and our ~80 person scout program, so we have not actively developed this further."
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— Ariana Thacker, Conscience VC

Diligence workflows

Most funds have a diligence process that involves surfacing all of the things they need to know before committing to invest (or pass) on a deal.

This often includes a lot of internet sleuthing, data room analysis, and outreach to experts to understand the market, identify competitors, investigate the business’ core KPIs, and identify opportunities and risks. This intel is often centralized and shared with the team to discuss and decide on next steps. In many cases, this is an iterative cycle that proceeds for several days.

While designing their diligence workflows, funds prioritized:

• Building automations and using AI-powered diligence tools to speed up the diligence process and accelerate the process of learning about a new domain
• Taking unstructured data about a company and putting it in a digestible format within a CRM
• Use of domain experts and research databases

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How Untapped Capital manages their diligence

"Wokelo.ai is a powerful diligence tool, which we combine with our own AI analyst. Our AI analyst identifies most relevant companies, unicorns, and recent acquisitions, does a sentiment analysis on Product Hunt reviews, pulls tech stack from BuiltWith, and does basic reasoning with OpenAI to understand customers, risks, market, etc."
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— Yohei Nakajima, Untapped Capital

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How Conscience VC manages their diligence

"Lately we've relied on Perplexity.ai to ramp up quickly in new domains (with QA/QC referring to the sources listed). Perplexity has given us a launching point for our learning in new areas and companies, and has been especially useful for our initial diligence calls with founders. We frequently lean on the tool to discover gaps in our understanding about a business, determine which technical advisors are needed to supplement our diligence, and to highlight key risks in the companies we are evaluating. I personally use the tool to learn after hours on scientific subjects that are most interesting to me outside of the companies we are in active diligence with. Tegus provides thousands of expert interviews, which provides helpful context to our existing portfolio, and also helps us assess the market opportunity of companies. It's a mechanism for expedited customer discovery."
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— Ariana Thacker, Conscience VC

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How DVC manages their diligence

"Our diligence process is 3-step: first, a deal-captain (either a GP or an active LP) introduces a deal and fills a short Airtable form to capture their first subjective impressions on the team and the product. Then, we discuss the startup with the LP community: to tap into their expertise and identify any non-obvious risks. Third, our analysts quickly evaluate the deal parameters and calculate potential outcomes to see if it aligns with our fund’s model.

One of the biggest bottlenecks in our diligence is collecting and updating data on startups, and populating our Airtable with it. This data often comes in the form of an email, a text update, or a PDF deck. It contains pictures, logos, graphs, and charts, and requires a human analyst to process and break down.

To automate this, we’re building 'AInalyst'. This is how it works: We upload a file and all of the text blocks and charts in it are recognized by LayoutLMv3 and converted into text. This text is fed into GPT-4 via LangChain to extract the information that we need (and list the most important pieces of info that were missing). This tool is built using Python FastAPI and a lot of work is done by clever prompt engineering. Data processed by AInalyst is both used to run analytics and to create mini-memos for LP community discussions."
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— Nick Davidov, DVC

How Craft Ventures manages their diligence

"We use SaaSGrid to do financial diligence on all our B2B deals. SaaSGrid is a SaaS data platform: they help start-ups wrangle data from Salesforce, Stripe, Quickbooks, etc., and create dashboards with key SaaS metrics. In our ideal scenario, companies already use SaaSGrid and share access with us. We know if they use SaaSGrid we can trust the numbers. If they don’t use SaaSGrid, we collect raw data from them (an MRR waterfall and P&L) and create our own SaaSGrid dashboard to analyze their numbers. By always doing financial diligence the same way, we have a huge data repository that helps us spot true outliers."
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— Bryan Rosenblatt, Craft Ventures

Team Communication workflows

Teams at venture firms often have structured, recurring communication routines that allow them to collaborate, plan, and execute. These include weekly team meetings, investment committee meetings, Monday kickoffs, end-of-week summaries, and more.

While designing their team communication workflows, funds prioritized:

• Structured meetings to align on top priorities and statuses
• Building transparency across teams so that folks know what colleagues are working on and can offer help to each other
• Push intel into channels that everyone can access to maintain transparency and improve async collaboration

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How Conscience VC manages team communication

"We communicate via Slack and weekly team meetings to catch up on opportunities and internal operations. We do a daily ‘quick state check’ via Slack and list what we intend to accomplish for the day. The entire team sees this and has an opportunity to discuss priorities in the firm and offer resources to help each other. At the end of the day we notify the team what was accomplished."
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— Ariana Thacker, Conscience VC

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How 81 Collection manages team communication

"We have an Investment Committee every Tuesday. We also have an internal Monday Meeting where we go over all firm-building activities for the week. But, most importantly, every Friday, we require everyone to take 15 minutes and send an email to the entire team (there are only 8 of us). This email has just 9 bullet points. 3 things they are proud of. 3 things that keep them up at night. 3 goals for next week."
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— Vijen Patel, 81 Collection

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How Chapter One manages team communication

"We place extreme importance on fostering effective team communication, especially given that over 50% of our team operates remotely.

Every Monday, our team meets via Zoom to review our top priorities for the week within each pod, share individual highs and lows from the previous week, and share some lighthearted stories about our weekend. We streamline this process by having each team member prepare their segment in advance using Tome. Staying connected in real-time is a priority for us, and our pods usually hold 1-2 daily meetings to maintain ongoing collaboration with their pod. As the week draws to a close, each pod writes a weekly recap to share via email to the team, ensuring everyone is informed and aligned.

To facilitate informal day-to-day communication, we use Discord, thoughtfully organized into multiple channels. We bring the entire team together quarterly for an offsite at our Santa Monica HQ or another destination, creating valuable opportunities for IRL work and team bonding"
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— Jeff Morris Jr., Chapter One

Relationship-building and collaboration workflows

A recurring theme in Signature Block: VC is a relationship business. Tracking connections is akin to tracking deal flow. Often, the same tools such as spreadsheets or Airtable or Affinity are used for this purpose. Some investors shy away from “overtooling” with complex CRMs or mail merges, preferring to keep the relationships much more personal.

While designing their relationship-building and collaboration workflows, funds prioritized:

• Creating a centralized source of truth that can be easily shared across LPs, founders, advisors, co-investors, and more
• Building tooling and processes to scale the ingestion of and actioning on portfolio company updates
• Ensuring connectivity with automated reminders to catch up
  

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How Factorial manages relationship-building and collaboration

"In Airtable, our ’People’ base is also our source of truth when making investor intros. All investors we work with are in the same Airtable along with their categories and stage of interest. So when there are companies we think would be a good fit, we pull up our list of investors interested in that stage or category (or both) and can automatically draft intros. We like to automate tasks for ourselves by creating drafts, but typically we end up adding more color to the email before it goes out:

This also helps us track who we’ve introduced people to, what investors are consistently meeting with our portfolio companies, and which investors may be less active or less interested in the same categories we are. Our process is to look through this Airtable interface with founders, Factorial will have entered a description of the company, and then we use the above ‘Draft Intro’ button above which drafts a ‘Double-opt-in’ email. Once that is accepted (this is accepted manually because, again, we don’t want to productize things for other people). We have a separate interface to update it to ‘Introduce’ which then drafts a new introduction after the double opt-in is accepted."
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— Matt Hartman, Factorial

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How Conscience VC manages relationship-building and collaboration

"I use a combination of spreadsheets and Affinity to keep track of folks where there is stronger alignment and reach out more ad hoc with opportunities that I feel are relevant or interest in catching up. I also use our Slack channel as our community hub, where I share resources and announcements for our founders, LPs, advisors, scouts, and more. I also love hosting events in various cities (we use tools like Partiful and Luma for this) — this is a great way to catch up with many investors at once, and meet new ones."
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— Ariana Thacker, Conscience VC

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How Ben’s Bites Fund manages relationship-building and collaboration

"I share my list of deals in a pipeline with investors I like to collab with, and ask if they want any intros. This is mostly recorded in Airtable and conducted via email. All investors in my network are also in my ‘People’ table in Airtable."
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— Ben Tossell, Ben’s Bites Fund

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How 81 Collection manages relationship-building and collaboration

"We track all relationships on Streak, but we love checking in with our friends once per month. We would rather have higher quality, lower quantity of relationships. Hot take, but I think too much software can be a bad thing. I think 5-10 is great, but I've found that over-doing it on our CRM or snippets or mail merges or technology in general detracts from our success. At the end of the day, we are in the business of relationships. We are building relationships with founders, with LP's, and with. Relationships are built upon the basis of trust, and I find it much more impactful to send a text to see how someone is doing in their lives. A mail merge isn't going to pick up that a founder just found out his dad has Alzheimers, or that another investor missed a promotion she was expecting."
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— Vijen Patel, 81 Collective

Portfolio support workflows

A “value add” investor needs to earn that title. Many claim to be super helpful, but founders want action over talk. Oftentimes a clear process for tracking portfolio updates, understanding their needs, and following through in founder requests can help set investors apart.

While designing their portfolio support workflows, funds prioritized:

• Ingesting and tracking portfolio company updates in a scalable manner
• Converting founder requests into actionable next steps
• Triangulating where the most helpful connections lie

How DVC manages portfolio support

"50 out of 55 companies in our portfolio provide us with monthly updates. Previously, we would read the updates during our team syncs, identify the best ways to provide assistance and email the companies. However, as our portfolio grew, this process became a significant burden. To alleviate this, we automated it with Ask2Task. Whenever an update is emailed to us, it’s fed into GPT-4. Through smart prompt engineering, GPT-4 converts the founder's requests (and even identifies needs they might not have known existed!) into actionable tasks for our community members. It also suggests which community members would be most helpful based on their profiles and tags (sourced from Airtable)."
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— Nick Davidov, DVC

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How Untapped Capital manages portfolio support

"We're always experimenting, shipping, and sunsetting various ways to support founders. We primarily do this through our no-code founder portal built on Softr, with Airtable as a back-end. Starting in August '22, we started including AI tools such as a blog post writer, SEO keyword generator, as well as Mini-Yohei, a VC expert. We also expose our network directly to our founders, which we're currently cleaning up to allow for better search. There are also a handful of forms that kick off a formal request, such as to help promote their social content — though candidly they tend to just DM on Twitter, which also works."
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— Yohei Nakajima, Untapped Capital

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How Conscience VC manages portfolio support

"We commit to founders early in their process and can champion their company to our network of investors — we have a strong reputation as’“super-connectors.’ We have also built internal tech products to facilitate investor introductions, including a fundraising app with 1750+ investors in our network, available exclusively to portfolio founders."
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— Ariana Thacker, Conscience VC

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Of course, there are almost an infinite number of workflow configurations that you can set up, but we hope that outlining these concrete examples from active investors proves helpful to you.

If you haven’t already, subscribe to Signature Block to get the next one in your inbox.

Until next time,

Ryan, Michael and Vedika from Weekend Fund :)

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