How Affinity provides Sapphire Ventures insights into its pipeline and portfolio

Introduction

Sapphire Ventures is a global venture capital firm with $11B+ in AUM and team members across Austin, London, Menlo Park, and San Francisco. In 2018, the firm decided they needed a dynamic CRM that would move them toward one centralized system of record that provided data anyone could easily access regardless of role, geo, or vertical. 

Affinity centralized the firm’s data and network and enabled the team to collaborate asynchronously. With Affinity, Sapphire can now:

• Work effectively together on multiple deals and eliminate potential crossed wires when reaching out to prospective companies
• Set up parameters to define whether a potential company is in scope and proactively communicate with in-scope opportunities on a cadenced basis
• Use enriched company and people data to more holistically evaluate opportunities and support and scale portfolio companies with the right network introductions

Challenge

Static spreadsheets with little context or traceability

Like many VC firms in the 2010s, Sapphire Ventures historically managed its investment pipeline and portfolio companies through multiple spreadsheets. 

This worked for Sapphire for some time, but it became very difficult to maintain accuracy and historical context because there was no record of who added what and when. “Once you have multiple people working asynchronously, you're unable to see when something was added and/or when something was changed,” Charlie Rexford, Chief of Staff, says. “That audit trail is so critical because then it allows us to really make sure that we know how to prioritize the companies.” 

Sapphire first adopted another CRM, but the user interface was clunky, and the workflows weren’t designed to support private capital. The firm needed a better way to holistically manage pre-investment opportunities and the portfolio companies that resulted from those investments.

Solution

A CRM that supports asynchronous collaboration

With Affinity, Sapphire now has a dynamic system of record, which allows Sapphire employees at any given point to access the most up-to-date information. “What we like is that Affinity is built for the private capital markets,” Rexford shares. “Because of the views it has and the integrations with CrunchBase, Dealroom, and PitchBook, we can pull data into a central repository, filter for it, and track the companies that we're aware of in a way that allows us to deliver value across our firm.”

Rexford continues, “Affinity gives us the building blocks to set up our internal workflows in an efficient manner.” If a person in our London office comes across an interesting opportunity but it’s an American company, they can tag the opportunity appropriately so when the US team checks Affinity, “it will show up in that very specific opportunity screener, and then the team that covers that sector can see it.” 

Using the Notes field for that opportunity, the London team member can add contextual information that tells the US team how they came across the company and relevant information, eliminating an unnecessary meeting. Employees can also see any history of communication between the firm and the company, removing the risk of communication breakdown or crossed wires.

“Affinity is a three-dimensional table because you have the companies going down, you have the variables going to the right, and then you have time going in, and that is super helpful for us as we run our business,” says Rexford. Having this additional timestamped data readily available at their fingertips means the Investment team can easily track how long a company is in seed stage, Series A, and beyond and define when that company aligns with Sapphire’s investment criteria. 

With Affinity, Sapphire can now track a company from its early stages, when it may not be the right time to invest, and have parameters in place to know when the company’s stage aligns with Sapphire’s investment scope. “That time series aspect is critical to us being able to prioritize and stack our opportunities of potential investments and current investments,” says Rexford.

Surfacing the right connections in every situation

"We're able to identify if someone within our organization—and it may even be the most junior person—is connected to a very senior leader at a company. That's how we're able to leverage Affinity for the discovery of our network and to try making introductions or setting up advisory sessions with different parties." - Charles Guo, VP of Business Development

In addition to the Investment team’s daily use of Affinity, the Portfolio Growth team is also in the CRM on a regular basis to support the scaling of their portfolio companies. Sapphire uses a lot of their network to make that scalability happen. 

“We're not just one individual; we're not just the Portfolio Growth team at Sapphire,” Charles Guo, VP of Business Development, shares. “We're all part of one Sapphire. We have lots of other great folks in the organization, whether they're investors or functional leads, that have daily relationships or ones they’ve made over their career that we get to tap into when we look at Affinity.”

With Affinity, the Portfolio Growth team has instant access to the firm's collective network, surfacing the strongest contacts and the best potential warm introduction. “We're able to identify if someone within our organization—and it may even be the most junior person—is connected to a very senior leader at a company. That's how we're able to leverage Affinity for the discovery of our network and to try making introductions or setting up advisory sessions with different parties,” says Guo.

Sapphire also uses Affinity’s enriched data fields to compile helpful tags used to create hyper-targeted lists. “Affinity pulls in the most salient parts of that person's background, so we can see where someone worked before, titles, etc.,” says Guo. This is especially useful when the firm is planning events where they want to invite a very specific subset of people. 

Results

One CRM enabling people, process, and product

Rexford uses the framework of people, process, and product to summarize how Affinity has been able to empower Sapphire Ventures’ workflows:

People: “Venture capital is a relationship-driven business at its core,” says Rexford. “We win through our relationships, and it's also through our ability to judge whether a person is capable of executing the plan that they set forth.” Affinity quickly surfaces relevant, up-to-date information, allowing all teams at Sapphire to access the people data they need to evaluate potential founders and make the right introductions. “People change jobs and titles,” adds Guo. “The great thing about Affinity is that, over time, we don't have to manually codify everything right there. There’s a global data set that refreshes and updates.”

Process: Sapphire now tracks and manages opportunities in a standardized way, which enables the firm to scale their operations and capture and use data in their decision-making. “Without Affinity, we would have no way to add people to certain fields and lists and no way to export and import data in and out of the system that is flexible enough for the operations of our global firm,” says Rexford.

Product: Because the whole team is in Affinity, Rexford shares, “We are able to work hand in hand with the Portfolio Growth team to ensure that the companies we invest in get the proper care they deserve in order to take them to the level where they're ready for an IPO or an exit.” To enable this holistic management from pipeline to portfolio, “Affinity helps enable us to accomplish that task.”

As the team continues to use Affinity, they’re looking at the latest features to continue leveling up the way they work. “We've been piloting Affinity’s AI Notetaker,” Guo shares, “and there's a lot of things we like about how it integrates into our workflow.”

With Affinity as their CRM, Sapphire manages end-to-end deal flow and portfolio support in a proactive, data-driven way that gets results.  “Affinity is a real-time system that enables our firm to understand the opportunities we're tracking, the metrics we're tracking on those opportunities, and whether or not we're allocating resources efficiently so that we are optimally covering the right companies,” says Rexford.

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_{* “Companies” represents all Sapphire direct growth strategy investments made from the firm’s inception in 2011 to December 2023;}

_{“IPOs” represents all Sapphire direct growth strategy investments that have had an IPO or public listing from the firm’s inception in 2011 to December 2023;}

_{“Acquisitions” represents all Sapphire direct growth strategy investments that have had an IPO, M&A, or public listing from the firm’s inception in 2011 to December 2023;}

_{“Assets Under Management” represents Sapphire’s Growth Strategy Regulatory Assets Under Management as of 12/31/2023 per ADV filed March 2024}

_{Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures (“Sapphire”). Information provided reflects Sapphires’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. No assumptions should be made that investments described were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results.}