Every business is all about setting “Processes” that work efficiently. In certain businesses, such as those that are well-understood and structured, processes are passed down through classical study, learning and such, but in other fields, it is not always so cut-and-dry, and the rules aren’t set.
Venture Capital Fund Investing and Portfolio Reporting is said to be one such field of work where you learn not through textbooks or such resources but through pure experience obtained by working alongside and under those who are already experts in the field. The better people you work with, the better you will be able to grasp the intricacies of businesses and create these processes for yourself.
That being said, with the advent of the internet age, and modern software and tools that are available today, this unstructured business too can be streamlined into something workable which can literally shave years off of the learning your “Learning Phase” of this trade. Today we will look at three different problems that Venture Capital Fund Managers face, and how modern technology has that already exists can streamline their workflow.
1. Portfolio Reporting Consistency
The most important thing for Venture Capital Portfolio Managers is the ability to organize and analyze data. Data is what helps venture capitalists make the right decisions. For this, venture capitalists need sound data regarding several investments spanning several years, which is an exceedingly challenging task when your data is constantly evolving and becoming more and more complex with time.
2. Maintain Strong Portfolio Relationships
It is critical that venture capital portfolio managers gather a large amount of data from the companies that they are involved with so they can pipe these back to their shareholders, whom they have a fiduciary responsibility towards.
And in order to this, a venture capital fund must maintain strong and close relationships with the companies they are working with, as well as a regular data channel that tracks business operations and KPIs.
3. Don’t outsource Back-Office Work
Outsourcing back-office functions is something that several venture capitalist funds seem to be doing these days, but there is little benefit and a high level of risk associated with this. Service employees can be careless and often neglect to check and double-check their data creating a high risk of there being human error in the data which can snowball into something much larger and problematic for a company. There are several instances of human error destroying financial systems because of human error.
The Catch-All Solution.
The catch-all solution for most of the problems that venture capital funds face is to use a modern venture capital portfolio management software. Not only will such a software serve you the right reports in the right way as and when they are needed, but it will also minimize human error, sharply reducing any risk of critical problems. Additionally, several venture capital fund management software is also enabled with pre-set algorithms and AI capabilities which can accurately predict several things depending on the data thatś been fed into it.
Software For Venture Capital and Private Equity Firm 