Your CRM has the potential to be the most powerful tool in your tech stack—but is your firm getting the most out of it? One clear way to do so is by pulling metrics from your CRM to help inform business strategy.
From our work with thousands of VC firms, we’ve learned that reports are typically created by one of two personas:
- One or more platform (or Ops) managers who are responsible for keeping the tech stack working
- Several metric owners who share reporting duties with no clear owner
Either way, tracking and analyzing metrics to drive operational efficiency can often be pushed down the priority list. Platform managers are often more focused on supporting portfolio companies; and when there is no clear owner it gets handled by members of the deal team (Associates and GPs) who may be prioritizing deal generation tasks over long-term analysis of operations.
When VC firms use their CRM as their system of record, there are countless metrics that can help them understand what really grows their business. And with a better understanding of the metrics that truly move the needle, more time can be spent on activities that are proven to be effective.
What clear metrics reporting looks like
Your metrics reporting should fulfill two goals:
- Clarify which actions and decisions support successful deal sourcing and fundraising
- Reveal which actions and decisions are the most and least efficient in closing deals
When you track the right metrics, you can improve your business operations from end-to-end with insights that drive efficiencies.
But how do you know if you're tracking the right metrics? To find out, we sought to understand what business questions VC firms want to answer with their data. We also worked with our own product team to determine which reports best answer those questions.
The metrics are split by the top priorities for VC firms: deal flow, fundraising … and one bonus metric we’ll dig into at the end of this article.
You’ll leave this post knowing what to track, how often, and how to get up and running quickly.
These reports won’t add much additional work beyond what you’re already doing, but they will ensure you’re answering business questions that pave the way for firm growth.
Metrics that support deal flow
When tracking deal flow, every VC firm is different depending on their target company profile and overall investment thesis strategy. Some metrics may even fall outside the realm of the conventional.
For example, Jenn Hankin, Chief of Staff at StartUp Health, says, “For each company, our onboarding team measures the number of months of runway and how much capital they've raised—but then we have our own internal scorecards to evaluate companies we want to bring in. We score a founder’s Health Transformer Mindset, which reflects the mindset of the founder.”
For Buoyant Ventures, analysis of their previous pipeline helps the team make improvements to their processes.
Managing General Partner Amy Francetic says:
“We are actively doing portfolio and pipeline reviews and using a dashboard that’s very easy to pull up, that shows companies at different stages, and that everyone can add notes to. We tracked around 1,000 companies and that turned into nine investments—so it’s helpful for us to do some analysis on that pipeline and understand what were the characteristics that led to the investments we made.”
There are some core universal metrics that can help you close more deals in a more efficient way. Here are some fundamental questions to answer with your CRM data:
1. How many deals do we have in our pipeline?
Recommended cadence: Weekly
Why it’s important:
- Resource allocation: If you see a large number of potential deals, you may need to increase overall firm headcount, from support staff and operations staff to Associates.
- Sourcing efficiency: On the flipside, if you have a large volume of potential deals early on but end up spending a lot of time screening out poor fits, this could be an indication of poor pipeline health—and an opportunity to tighten your initial sourcing criteria.
- Outreach prioritization: If you’re seeing a low number of potential deals, you may need to prioritize outreach for a certain period of time.
- Risk management: Comparing your deal pipeline to existing LP commitments mitigates financial risks for the firm.
How to track using Affinity:
Every report in this blog is easy to create. For example, understanding the number and quality of deals in your pipeline is quickly done through the Funnel Analysis template.
There are other ways to gauge pipeline health:
- Explore future meeting activity, including meetings that are scheduled but haven’t taken place yet, by filtering Team Activity Interaction Date to only include interactions after the present day.
- Track weighted averages and forecast the sum of your pipeline by assigning win probabilities to each status option. Check out this help center article for detailed instructions.
2. What do our most successful deals have in common?
Recommended cadence: Monthly
Why it’s important:
- Prioritization: When you know what success looks like across many deals—whether it be location, industry, funding round, or something else—you can replicate that success by doubling down on what works and spending less time on what doesn’t.
- Efficiency: Common metrics are like a treasure hunt that helps you spot promising deals earlier than you normally would, so you can funnel more resources into them.
- Long-term growth: Use common data on successful deals to develop the thesis for your next fund.
How to track using Affinity:
Affinity Analytics provides options for insightful and scheduled analysis about deal sourcing trends. Assess deal sourcing metrics like location, source of introduction, or categories (e.g. events vs. co-investors) then layer on employee growth or latest revenue using Dealroom data for a holistic view of what a successful deal looks like for your firm.
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3. What stage of the deal process takes the longest / shortest amount of time?
Recommended cadence: Quarterly
Why it’s important:
- Resource allocation: The goal of answering this question is to identify where deals get stuck. If you’re noticing that one particular part of the deal process takes longer than others, you may need more or different resources for that stage to speed things up. You can do this reporting at the team and/or Associate level.
- Process improvement: It might not just be a case of resourcing. If one stage of the deal process typically takes longer, you may need to re-evaluate your activities. If there are team members falling short, you can use this reporting to identify who could benefit from additional training or mentorship.
- Forecasting: When you know the average time for each stage of the deal process, you’ll be able to forecast your future deal flow more accurately and make informed decisions about your investment strategy. If deals are passing through stages too quickly, use qualitative factors to determine whether you’re seeing a good streak or whether it’s time to tighten up your investment thesis. You may need more focus for long-term growth.
How to track using Affinity:
Use the Funnel Analysis template to easily see a breakdown of how long each stage of the funnel is taking and quickly identify areas for optimization. Two visualizations to pay attention to are:
- Deal Funnel
- # Status Changes / Avg Days in Each Status
To build a standalone visualization on days spent in each status, check out this help center article.
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Metrics that support fundraising
While most deal flow metrics are about understanding the past and evaluating the present, fundraising metrics are about trying to predict the future as accurately as possible.
Jenn Hankin, Chief of Staff at StartUp Health, says:
“We use the reporting feature in Affinity to determine the likelihood of closing capital at different times of the year. We want to understand that there are X number of prospects with X amount of money, which are warm leads that could close in Q4, which prospects are hot leads that could close in Q3, and what those numerical buckets look like compared to when we could potentially see funds coming in.”
Amy Francetic, Managing General Partner at Buoyant Ventures, told us about the value her team gets from reporting on engagement with LPs between fundraising rounds.
She says, “Now that we are done fundraising we’re shifting gears to using Affinity to communicate and track engagement with LPs. For folks that didn't invest in Fund I, but who said they were interested in Fund II, we’re trying in a very organized way to give them updates. This means staying engaged with them so that when we’re ready to go out for the next Fund they’ve been getting a regular drop of information and updates from us.”
Here are some fundamental questions you can answer about your fundraising activities with your CRM data:
4. What is our fundraising forecast for the rest of the quarter?
Recommended cadence: Weekly
Why it’s important:
- Risk management: When you assess the value of your pipeline versus the value of your actual capital, you’ll be much less likely to overcommit.
- Investment allocation: When you know how much you can spend, you’ll be able to more accurately plan for upcoming deal activity.
- Forecasting accuracy: By layering on time-to-close metrics, you can be more precise about when funds are likely to come in.
How to track using Affinity:
To effectively forecast your fundraising, you’ll need a report on conversion rates for each stage of your funnel. Build this using a probability-adjusted report on the Opportunity List you use to track fundraising. Learn how in this help center article.
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5. How likely are we to close capital at a certain point in the year?
Recommended cadence: Annually
Why it’s important:
- Optimized annual cadence: When you know your best fundraising season, you can spend the rest of the year more focused on sourcing deals and supporting portfolio companies. Even if you’re not fundraising every year, use this backward-looking analysis to identify the optimal time to start your next round.
- Resource allocation: If you know you’re more likely to close capital in Q4, for example, you can allocate more resources to speed up the process.
- Forecasting: When you know you’re more likely to close capital at a certain point in the year, you’ll have more time to adjust your investment thesis and strategy if you need to.
How to track using Affinity :
Start by building a dashboard on the List you use to track fundraising opportunities. To see which months you close the most fundraising opportunities, create a List Summary report with the dimensions:
- Close Date Month Name
- Count of Opportunities
6. Am I prioritizing engagement with the right LPs?
Recommended cadence: Monthly
Why it’s important:
- Relationship management: Monitor interaction history metrics like calls, emails, response rates, and click through rates across your LPs. With this, you’ll know when to reach out to maintain strong, healthy relationships—so you don’t get caught scrambling when the next fundraising round comes along.
- Engagement efficiency: With custom metrics like previous funds invested in, total invested (across funds or per fund), investment focus (by industry, location, etc.) you can understand your warmest leads and prioritize engagement where the investor’s history aligns with your current fund’s investment thesis.
- Increase repeat investments: Focus activities on LPs that are most likely to invest again.
How to track using Affinity:
Create a report of your least engaged LPs so you can prioritize outreach. To do this, build a dashboard on the People List you use to track LPs. Then create a Team Activity report using:
- Dimension = External Participant Interaction
- Measure = Interaction Count
Note that you will want to filter the interactions based on time and threshold. For example: Over the past six months, less than five interactions.
7. Bonus metric: How can we showcase the value we provide to portfolio companies?
Recommended cadence: Quarterly
Why it’s important:
This isn’t about bragging—it’s about accountability and transparency.
Firms want to show how they bring value to their portfolio companies (as well as current and potential investors), but it’s sometimes difficult to measure it with quantitative metrics. While it will always be important to add color to every portco report, you’ll also want to include a section on quantifiable metrics that can provide an at-a-glance overview of the value you’ve brought to the company.
These metrics can include things like:
- Number of introductions made: new hires, potential customers, other investors
- Number of events attended
- Increase in company valuation since you started working with them
- Employee growth rate
How to track:
A simple way to show your value to founders is to highlight the number of emails and meetings you’ve had over a quarter. Do this using the Team Activity report template on an Organization List with your portfolio companies.
Look to the top row of this template for a breakdown of the interactions you’ve had with the Organizations in the List. Access further details by clicking on the bar to see who the meeting/email was with.
Need help setting up your Affinity reports? Reach out to your CSM for help.
Not a customer yet? Schedule a personalized demo to see what Affinity reporting looks like in action.
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