How Cavalry Ventures leverages Affinity Analytics to make data-driven decisions

Introduction

Founded in 2016, Cavalry Ventures is an early-stage venture fund based in Berlin with over EUR 260 assets under management. Cavalry usually invests the first check in a company and focuses on European pre-seed or seed-stage technology companies across the enterprise as well as consumer spaces.

As a small team with a lot of connections and data, the firm needed a CRM that would provide mapping and understanding to their relationships, as well as an ability to harness their company and team data to enable better strategy and decision making.

Affinity immediately synced the firm’s network, and the team has been able to leverage the dashboards they’ve built with Affinity Analytics to analyze investment patterns, which they use to pinpoint learnings from missed opportunities and see where they can replicate successful investments.

With Affinity, Cavalry can now:

• Centralize data in one place, syncing the team’s network and capturing introductions made by their external network in real time vs. static manual snapshots
• Leverage different views (lists, kanban, and dashboards) to scale their day-to-day tasks, weekly pipeline reviews, and overall investment strategy
• Apply various data points from Affinity into a formula used to determine team performance and areas of improvement

‍Challenge

Unlocking the power of data and relationships

Starting a new firm in the early stage investment space and scaling that firm come with very different challenges. While the first generation of funds is primarily concerned with building a critical mass of deals that fit your investment scope, the later generations are primarily concerned with controlling and efficiently managing this growing soundscape. “It’s not about reinventing the wheel - with your first funds it’s about excelling in the few things that really matter while living up to a clearly defined value proposition,” shares Fabian Krautwurst, Principal at Cavalry Ventures.

Cavalry Ventures, a Berlin-based venture firm, specializes in first check investing for European pre-seed or seed-stage technology companies. Since its founding in 2016, Cavalry has scaled to EUR 260+ million in assets under management and is currently investing out of its third main fund. As they continued to scale rapidly, Cavalry built a critical mass of data and quickly realized the potential of this data to maintain fund performance as they scaled. They were capturing most of the data manually and ran ad-hoc analysis, but as Krautwurst shares, “it was more static, and we tried to leverage it over time, but it was very cumbersome.”  

Solution

A CRM with views for everyone and every task

"We started working with Affinity about five years ago, with the idea to improve our relationship management," Krautwurst explained. "In the first place, it was really about mapping and understanding the relationships we had - because it wasn't possible to capture those interactions in a structured way yet.” 

Cavalry was able to sync the firm’s contacts, emails, and other data in Affinity, and with the help of the Customer Success team, the firm began using Affinity’s Analytics capabilities. “Affinity’s Customer Success team was more than helpful, especially in the beginning to set things up and also, maintain the dashboards.” With their data now in Affinity, Cavalry was able to succinctly use three views available in Affinity for very distinct use cases in their day-to-day operations.

List view: The list view is used for ad hoc analysis of deals that fit certain criteria, such as industry or past performance. The team also uses it to map and manage LPs and their portfolio. As Krautwurst shares, “This view is useful, for example, if you want to share a particular section of your deal flow with a third party in CSV format.”

Kanban view: The Kanban view serves as the primary interface for Cavalry employees in their daily operations. It facilitates the monitoring of deal flow management and aids partners in assigning resources for specific meetings.“You can perfectly see how deals progress within your pipeline and quickly get an overview,” says Krautwurst.

Dashboard view: The dashboard view provides more insights and unlocks high-quality deal flow in an efficient manner, allowing the team to learn how to better source deals based on previous investment patterns and outcomes.

Dashboards that highlight patterns

As noted earlier, Affinity's dashboards enable the Cavalry team to improve their deal-sourcing efforts based on past interactions. Furthermore, they will delve into the reasons behind their decision making to determine if they are indicative of broader patterns. Krautwurst says: "It's really worth looking for patterns in our decision-making. We use Affinity Analytics to slice and dice everything to understand our decision making and if there's a pattern. Feedback cycles in VC are long by nature. So we really try to make the most of the few information points available.”

The dashboards the team at Cavalry uses to analyze patterns and infer findings include one around their external sources of introductions, meaning people outside of Cavalry who shared an opportunity with the team. The dashboard showcases the count of organizations that the respective external person shared, and the historical amount of funding that all of these organizations raised after Cavalry assessed them. In addition, the firm utilizes a formula that generates a trending score, which is continuously updated with additional data. This score is an additional indicator of quality and helps Cavalry manage its network activities.

Another dashboard helps Cavalry monitor and evaluate internal deal sourcing activities. With these opportunities tied to various investors on the team, Cavalry can look at who is bringing in which deals and use this information to identify areas of improvement. Krautwurst is quick to share “It's a great learning tool for us as a company, but also for each of us individually. While we obviously have great visibility on the shots we've called, this is a great opportunity to give everyone more holistic feedback on their sourcing and selection skills.” 

Results

Data-driven scaling

As Cavalry continues to scale their team and portfolio, the team can continue to hone their investment approach using the metrics Affinity Analytics surfaces in their dashboards. Says Krautwurst, “in a nutshell, I think it's about unlocking high qualitative deal flow in an efficient manner.” Affinity employs a quantitative approach to assist Cavalry’s team of 10 investment professionals in concentrating on the most promising opportunities.

Recently, Cavalry successfully completed the fundraising for their third fund, totaling EUR 160 million, and they are currently in the process of deploying these funds into investments. While navigating the sourcing and investment process, they can rely on Affinity's dashboards to offer the insights necessary for learning from past investments, enabling them to consistently make data-driven decisions.