How Kapor Capital streamlines LP management and fundraising with Affinity

Introduction‍

Kapor Capital is an early-stage impact venture capital fund with a rich history of investments in companies like Uber, Asana, and Twilio. Kapor Capital struggled with fragmented systems and inefficient processes when it came to managing deals and their broader network, leading to missed opportunities and difficulty tracking and accessing historical relationship data.

Affinity provides Kapor a centralized hub to carry out all of their pipeline, event, and LP management activities with all available data and contacts in one place, automating a number of once manual activities.

With Affinity, Kapor can now:

• Clearly track all the companies they’ve looked at and invested in report back to GPs and LPs
• Create centralized, dynamic LP lists that allow for hypertargeted outreach and detailed events management
• Capture and synthesize quantitative and qualitative data that helps predict investment probability among LPs for future funds

Challenge

Multiple systems with no clear view of Kapor’s network

Kapor Capital is an early-stage venture fund with over 25 years of investment experience. Since 2011, the firm has focused exclusively on impact investments, targeting companies whose products or solutions positively impact traditionally marginalized communities. 

As they transitioned from having a single LP to managing their first institutional fund of $126 million, Kapor Capital needed a robust solution to manage their pipeline, and expanding LP relationships and fundraising efforts. 

Moving to being an impact fund requires an even more in-depth level of communication than traditional funds with LPs, including distributing annual impact reports that showcase lots of detail around the fund’s overall progress. 

Unfortunately the firm struggled with fragmented systems and inefficient processes. "We had information scattered in different places - in Google Drive, Eventbrite, Asana, and Airtable. We kind of hacked them to help us with prospects and pipeline management, but it wasn't efficient,” Vallejo says. This, coupled with a growing team and busy employees who couldn’t always update Vallejo and the team on their progress meant the firm risked not capturing important information. It became even more difficult if someone left the firm because those established relationships they had created would often leave with them, including several coinvestors. 

Solution

Vallejo got to work on finding a solution. “I started doing my research, looking for what's out there that can potentially replace some of these systems, hoping we could just land on one or two tools to consolidate all of these different processes,” she says. That’s when the firm moved forward with Affinity. “Affinity replaced Asana. It replaced Airtable. It also replaced just a lot of random documents that were in our drive. Now it's all in one place.”

This immediately improved Kapor’s ability to manage deals with firmwide emails, meetings, and contact info in one place. “With Affinity, we have a clear pipeline view,” Vallejo says. “We can see how many startups we've looked at in a certain period over the year. We've also got these wonderful dashboards, all of which we didn't have prior.”

Strategically surfacing and scaling a network

One of the products of having a firm with years of experience is a well-rounded network. Before, an employee leaving Kapor could potentially cause a gap in that network because no tool was capturing all their interactions. “With Affinity, we were able to resurface contacts with founders that had exited and that we had sort of lost contact with,” Vallejo shares. “It resurfaced a lot of these different co-investor relationships that were kind of hidden, especially with partners that had moved on from Kapor Capital."

Affinity’s list views revolutionized how Kapor could manage pipeline and prospects, but also shifted how the firm approached events management and LP management, especially as they moved from one LP to multiple. "We create lists for everything," says Vallejo. "I'll have a larger list of LPs, and then I will filter out either by type of investor or location or the notes that I have that are specific to each investor."

This becomes increasingly important when the types of investors have more nuanced communication preferences. “Typically, the larger the institution, the less engagement they want because they're dealing with so many different funds,” Vallejo shares. This differs drastically from family offices, where they may be less knowledgeable about venture capital and the process around tech investing. 

In this instance, Vallejo says, “when I segment my family office LPs, I will curate programming for them differently, and then I'll even segment again from that family office list, and look at a smaller subset of who hasn't engaged with me at all over the past X amount of time.” This allows for a hyper-targeted outreach, something that wasn’t possible before Affinity.

The lists within Affinity also serve as a sophisticated tracking system to monitor LP engagement: "We track the amount that they've put into our fund… and we track attendance or engagement for events, and even if an LP doesn't attend, we still track that engagement,

Quantifying probability with Affinity 

Fundraising can be incredibly difficult, and there are a number of factors that can clue a firm into whether or not a current LP will continue to invest in future funds. “As we start thinking about fund four,” Vallejo shares, “we want to know, are they going to stay in the fund? Will they stay with the same amount? Will they stay with the less amount, or will they actually go over?”

While managing LP relationships with Affinity, Kapor has been able to harness the information captured through their events management and overall engagement and develop a way to quantify the probability around investment. 

The firm implemented a probability-based system for forecasting LP commitments using lists they created in Affinity. "We have a metric system where we calculate weighted points on events... that helps us understand how interested our LPs are, or maybe how engaged or happy they are," Vallejo says.

Setting up this predictive list allows the firm to capture the probability around their current investors and Affinity’s reporting capabilities make it easy to inform senior leadership. Vallejo shares, “Affinity helps me give a bird's eye view to our GPs on where these LPs might come in.”

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Results

Network management, simplified

Before Affinity, Kapor’s network and activity lived across a number of tools. Now, the CRM has transformed their ability to leverage their extensive network of relationships built over decades, allowing them to resurface valuable connections with founders, co-investors, and other stakeholders that had previously been hidden. With Affinity, the firm can capture almost 15 years of network activity in one CRM, replacing four different tools.

It’s also reduced the amount of time spent manually managing workflows. "The number one thing was efficiency. With Affinity, we have a clear pipeline view. We can see how many startups we've looked at in a certain period over the year. Everything is automated - I literally do nothing,” Vallejo shares. 

The platform has become integral to Kapor Capital's operations, particularly as they prepare for future fundraising efforts. As Vallejo concludes, "As we get started for the next fund... I know what my delta is between my current LP base and what I will need to source out from new LPs that are not in my base." As the firm continues to grow, they now know they can better understand their network will all relevant information surfaced in one place.