As a technology focused venture capital firm, we’re often asked how we make use of technology in running our business. While some software exists to help finance firms run their operations, there’s no magic “venture capital in a box” software (at least one that we’ve found) that would enable us to manage every aspect of running our firm. As a result we’ve put together our own technology infrastructure that helps us manage our business, better track information and more easily keep each other informed about what we’re up to.
We tend to think of the technology that supports our business in several broad categories that roughly correspond to the main functions of the venture capital business:
– tracking investment opportunities
– communicating our investment activities across the partnership
– maintaining a record of communication with our own investors (and information on their investments in our fund)
– performing cross portfolio analysis
– accounting and back-office
At the center of our technology platform is SharePoint (with NewsGator’s SocialSites added in, of course). We’ve set up a series of databases, wikis and internal blogs where we log all of the investment opportunities that we see (including information on their stage, location, how they were referred to us, etc.); communicate with each other important updates from the portfolio; track our investors and keep notes about our communication with them; and support other internal communication across Foundry (for example, various forms and templates, benefit updates, IT information, etc.). Importantly, all of this is available via internal RSS feeds so that everyone in our firm can consume information when, where and how they’d like (directly on the intranet, via our favorite RSS reader, etc.). We thank our IT guru, Ross Carlson, for doing a really nice job of developing our SharePoint infrastructure.
In addition to SharePoint, we use a few other software packages to help us manage our back-office functions. We won’t bore you with the details of our accounting and fund management packages, but one program that is central to our operations that is worth mentioning is Liquid Scenarios. Founded by a local Boulder entrepreneur, Liquid Scenarios allows us to track capitalization and financing information for each of our portfolio companies. For us this is the “system of record” for each of our investment’s capitalization as well as information about all of their financing rounds (preferences, dividends, protective provisions, etc). With all of this information in one place we can easily run new financing and acquisition scenarios (what we refer to as “the waterfall”) automatically and by investor, as well as look up round information that, until we installed this system, used to be contained in multiple financing documents (and, as such, generally took a meaningful amount of time to gather).
Similar to many technology implementations, what we’ve put together at Foundry is only as useful as the time we put into using it, and we’ve definitely had to change some of our long standing habits (particularly in our effort to log every investment opportunity we see as well as moving much of our broadcast updates off of email and on to the wiki). That said, the benefits have been both very real and quick to realize. Everyone at Foundry can quickly look up any of the potential investments we’ve seen since the founding of the firm (sorted by date, company sector, referrer, company name, etc), can quickly recap the last few months of activity across the portfolio and can easily access information about each of our investors.
Importantly, we’ve built our systems on a platform that is easily modified to adapt to our changing needs and requirements so that we can continue to innovate how we manage and run our business.
What we don’t have, however, is one system for “one stop shopping” of all this information. While we’ve developed technology that works for us for some things, we still do rely on Outlook and Excel to run parts of our business. As both investors and users, we see a hole in the current ecosystem for a company to better integrate all of these functions. Until then, we will be happy with our current system and be thankful for its general ease of use over what we used to use a decade ago.