3 Ways Technology Can Help Venture Capital
Posted by Rebecca Holloway on Sun, Jul 24, 2011 @ 04:05 AM
Despite all the investments in cutting-edge technology, venture capital is still an industry that is slow to change itself. Jeff Bussgang has written about it before with regard to the persistent demographic of VC firms. HubSpot’s Brad Coffey recently posted a blog at OnStartups that examined the ways that Google Ventures is disrupting the VC industry. It’s definitely worth a read to see how Google Ventures is thinking outside of the typical VC box and leveraging their own expertise to encourage and transform entrepreneurship.
Even if a VC firm doesn’t have the name recognition or resources of a Google, there are simple ways that it can make itself stand apart from the pack. By engaging the technology that is disrupting the way our culture interacts, processes information, and expects to stay informed, VCs can take the best of what technology has to offer to enhance the start-up community.
Get Social
It is actually quite surprising how few venture capital firms are involved in social media of any kind. Many have no presence on sites like Facebook or Twitter. Very few blog. Even the firms’ websites can tend to be stiff and limited, throwbacks to the previous decade’s approach to website design. By contrast, a few of the most active VC firms in the country seem to understand the importance of social media and do have a strong presence. They understand the importance of using it for establishing thought leadership, reaching their target market, and growing their network. Especially when investing in technology start-ups, it’s critical to speak your “investees” language by communicating through the mediums they are using. What does this mean? Join LinkedIn. Set up a Twitter account. Create a Facebook page. Blog regularly. Put out content that informs and encourages entrepreneurship. Your expertise and experience is valuable, so make it social.
Go SaaS
Deployed software is so yesterday. It’s all about the cloud. As we become increasingly mobile, the convenience of accessing your information anywhere you have an internet connection just makes sense. You can manage your pipeline through a cloud-based CRM so that it’s available whenever you need it and not just when you’re in the office. Woo potential investors with a branded investor portal from which they can see their investment activity and tax documents. Have your portfolio companies provide their interim financials, audited financials, board packages, and other reports via a secure online dashboard. All of this amounts to greater convenience, transparency, and efficiency for the firm.
Be Secure
Storing paper is costly and risky. Going paperless has so many advantages, not the least of which is peace of mind when your most important data is backed-up and secure. Over the last three years boards of directors are turning in increasing numbers to boardroom software for the distribution of board packages and the management of other board-related functions. No need to print, collate, and mail massive board books when it can be accessed via a lightweight tablet device at the click of a button. No need to worry about confidential information falling into the wrong hands.
Can you think of other ways VCs can use technology to stand apart?
