Relationship intelligence and finding the next unicorn

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When the pandemic struck, few thought that relationships of all kinds—including those that drive VC funding—could be relocated successfully online.

Yet there was more funding activity in 2021 than in the previous five years combined. To fuel those deals, VCs sent more emails, made more introductions, and held more meetings than ever before—despite the restrictions Covid has imposed on us all.

How do we know this?

We anonymized, aggregated, and analyzed the data in the Affinity platform.

The result: our new report, “The Relationship Intelligence Benchmark Report: Unicorn Edition.” We looked at data from nearly 950 unicorns from 2017–2021 and found that over 500,000 new introductions are made and 450,000 deals tracked per month across the Affinity platform.

We also found that while over 400 VCs have invested in a unicorn over the last five years, 74% have found only one. The story changes for the top firms, with the top 20 investing in 43% of all unicorns.

Diving further into the report, we also found that:

62% of unicorns were founded in the U.S., specifically in the San Francisco Bay Area—a percentage that has increased over the last five years.
The average valuation of a unicorn in 2021 was $7.48 billion, up from $2.3 billion the previous year.
Over the last five years, just 2% of unicorns have gone public or begun the IPO process.

Additionally, the research illustrates that:

74% of VC firms have invested in one unicorn, but only 6% have invested in five or more.
Top VC firms managed 22% more deals last year (more than 6,000) than in 2020 and held 16% more external meetings (50 per day on average).
Top VC firms have vast networks (2,293 per person) and make an average of over 2,500 introductions annually.

These firms all have something in common: relationship intelligence—insights gained from their network, business relationships, and customer interactions that help teams find, manage, and close deals.

It’s those relationships that play an important role in finding unicorns, and our more than 1,700 customers worldwide, according to our report, are doing three key things to keep them competitive:

Managing data efficiently: Freeing VCs from manual CRM data entry leaves them with more time for strategic endeavors, meeting key contacts—and hunting unicorns. According to a Forrester Report, nearly 70% of executives with CRMs believe that “customer, prospect, and account data comes from too many sources to easily make sense of it.” And manual data entry—from one source or a hundred—causes productivity to nosedive. As a result, plans to leverage automation to improve productivity are widespread.
Tracking deals accurately: Faulty, incomplete, and siloed data leads to missed opportunities. And a pipeline clogged with emails, notes from business meetings, and the news and financial data that inform a deal can lead to unreliable record-keeping. Successful VCs have gained confidence by moving beyond the spreadsheet. They track their deal pipeline on a centralized platform that ensures contact and company profiles are accurate, enriched with information from key third-party sources, and always visible to the entire team.
Finding the right relationships easily: Relationships are foundational for VCs—whether they’re unicorn hunting or just looking for their next deal. The most successful VC firms are moving beyond customer relationship management to relationship intelligence about their entire professional network. An automated relationship intelligence platform can help you find the right relationships, nurture them long-term, and open the doors that lead to successfully closed deals.

For additional information, download the full report.