In recent years, we have seen rapid growth and increased competition in the venture capital (VC) industry, with more funds and investors entering the market. As a result, traditional VC firms are looking to leverage technology and data analytics to streamline their operations, make better investment decisions, and stay ahead of the competition.

This shift towards data-driven decision-making drives the adoption of VC tech stacks and portfolio management software, enabling you, as a VC, to manage investments and the portfolio more efficiently and effectively.

According to a recent report by Gartner, “75% of tech investors will prioritize data science and artificial intelligence above gut feeling for investment decisions by 2025.”

What is a VC tech stack?

The VC tech stack is a collection of tools and technologies that enable a VC firm to manage fund operations and make data-driven investment decisions. The VC tech stack typically includes tools for deal sourcing, due diligence, portfolio management, and data analytics. Each component plays an essential role in the VC firm’s success.

All-in-one solutions available on the market embrace features from CRM, portfolio management, accounting, and data analytics tools. Often, it is more feasible for a VC firm to build its very own tech stack rather than buying an all-in-one solution.

Benefits of building your own VC tech stack

Building a tech stack provides the freedom & flexibility to mix & match tools & solutions. As such, it can better reflect your unique processes, your specific needs, and preferences. Capabilities & architecture of all-in-one solutions become your limitations in day-to-day work as well as in strategic decisions.

Additionally, building a tech stack gives you the liberty to keep up with the latest innovations and technology. Just think about the trend around Chat GPT and how many tools were born on its capabilities. With an all-in-one solution, you are limited by the company’s product roadmap and what their product department sees as important.

But in the reality of a flexible tech stack, you can implement any tool & solution you want in a couple of days.

The complexity of the VC tech stack

One popular article about VC tech stack, written by Francesco Corea on Medium, segments VC tools into 12 categories providing a few examples for each.

Traditional Data (Pitchbook, CB Insights, Crunchbase)
Alternative Data (Capterra, Github, Semrush)
Research (Forrester, Owler, Gartner)
Dealflow/ CRM (Startups) (Affinity, SalesForce, HubSpot)
Matchmaking Tools (AngelList, Crowdcube, Gust)
Network/CRM (People) (Relationship Science, 4degrees, Clearbit)
Portfolio Management (Vestberry, Carta, iLevel)
News Resources (Sifted, TechCrunch, VentureBeat)
Scouting Sources (Hackernews, Product Hunt, AppSumo)
LP Tools (For GPs) (eVestment, Betterfront, Qashqade)
Liquidity Instruments (Merger Market, Altio, Equity Zen)
LP Tools (For LPs) Infrastructure (Burgiss, Allocator, Clade)

This approach enables firms to leverage a combination of best-in-class tools and solutions to optimize their operations and investment decisions. By integrating portfolio management software into their tech stack, firms can streamline their fund operations, automate administrative tasks, and gain insights into the performance of their portfolio companies.

Portfolio Management Software for Fund Operations

Portfolio management software is an essential tool for VC firms looking to streamline their fund operations and manage their portfolio more effectively. These tools help you track portfolio performance, monitor key metrics, and make data-driven investment decisions.

Portfolio management software can also automate administrative tasks such as reporting, compliance, and financial management, freeing up time for fund managers to focus on value-add activities such as deal sourcing and portfolio value creation.

Have you met Vestberry?

Vestberry, a popular portfolio management solution, provides a suite of tools for portfolio tracking, financial reporting, cap table management, and data analysis. We enable VCs to track the performance of their portfolio companies in real time, monitor key metrics such as revenue and user growth, and make data-driven investment decisions.

About the author

This Industry insights piece is written by Marek Zamecnik, CEO & Co-founder @ Vestberry. Before establishing Vestberry, Marek previously worked in Kuala Lumpur in the investment company called Nova Founders Capital, where he was responsible for the development of the portfolio companies, namely Private Equity Insights.

Reach out to Marek and share your feedback & insights @ Linkedin

Industry Insights

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The dilemma: Building a VC Tech Stack vs. Buying an All-in-One Solution

Keynote: The State of Digitalization of Private Equity – Berlin 2022

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