How Sozo Ventures scales a $680 million fund across North America and Asia with Affinity

Introduction

Sozo Ventures is a venture capital firm founded in 2012 to invest in and support tech-enabled ventures through global expansion. With offices in the U.S. and Japan and a $1 billion AUM fund, the firm needed to centralize records to ensure all relevant information and interactions around deals, portfolio companies, and their broader network could be captured. 

Affinity quickly synced Sozo’s emails, meeting notes, contact information, and overall network, allowing all employees, regardless of location, to be able to quickly access information. The investment team can now easily track their deal flow in one place, and the teams working with LPs and portfolio companies can access relevant information, regardless of whether they attended a meeting.

With Affinity, Sozo Ventures can now:

• Automatically capture all interactions in one place, eliminating silos between teams on two continents
• Use lists to help match companies with the relevant Limited Partners and contacts in their network to help founders expand and scale their global operations
• Ensure the Fundraising team captures information about potential LPs using the same rubric so the team can quickly identify and assess funding probability

Challenge

Communication limits between two continents

Sozo Ventures has a globally dispersed team across the U.S. and Japan. In order to successfully adopt data-driven approaches, the firm relies on operations specialists who can ensure they are set up with the right tooling, processes, and metrics. 

Enter Lauren Gomez, a Principal at Sozo, who leads their Investment Operations. “I focus on being able to scale our pipeline through different platforms and continual process improvements,” Gomez shares. “We try to maintain a data-driven approach, and I optimize our deal flow to ensure a really seamless experience for our entrepreneurs, our LPs, and the various executives that we work with.”

Gomez has developed efficient investment processes across geographies and functions within the firm. This is incredibly crucial as Sozo scales rapidly; the firm recently doubled the size of their Investment team, tripled their capital under management, and continues to grow a team spread across two continents and twelve time zones. 

With the need for process improvements came the need for a tool that could help Sozo continue this rapid growth. Before implementing a CRM, “a lot of the communication and information was held in emails primarily, which, with a team spread across two different geographies, makes it extremely difficult to have full alignment and communication on the different deals and progress,” says Gomez. This led to missed opportunities and siloed workflows that would often cross wires as the team decided where to invest. 

As for post-investment, the relevant information on portcos and investors lived in individual spreadsheets and inboxes; there was no centralized place where someone could easily find all the information related to a founder or portco. As Gomez shares, “it was really just a full data dump, kind of summarizing all the activities, but it didn't have the context that is always important for good communication.” This made it difficult to help introduce portcos to the right LPs and made communicating with corporate business partners across the organization very difficult. 

Solution

A CRM that connects a global workforce

Sozo Ventures chose Affinity as their CRM of choice because of its ability to instantaneously capture and organize interactions and information about companies and people. “We love Affinity’s ability to gather insights automatically about companies,” Gomez says. “It's a huge time saver and benefit for us to be able to have the information at our fingertips.” The investment team now has one place to easily see the status of each deal, and can toggle between List and Kanban views to review everything during their meetings.

With a dispersed workforce, different time zones can be a major factor in why some information gets lost. “The amount of time that Japan and the U.S. logistically overlap is minimal,” Gomez shares. “That constraint makes us very intentional about how we structure meetings, so that when we do get together, we are talking about the highest priority items. It’s important to have systems that allow us to know about all the other things that are going on that may not require specific discussions.” With Affinity’s automation capabilities, anyone at any time in any region can easily reference all of Sozo’s information about a company or person.

Sozo’s Investment team also appreciates being able to easily edit fields to align with their deal flow. This ensures continuity with their way of operating, says Gomez. “There are obviously key pillars when it comes to deal flow statuses, but the way that each firm defines them is pretty unique, and we love being able to customize that in Affinity.” 

Affinity’s automations proactively notify Sozo’s Finance team with information about how deals are progressing through the pipeline. With this, there’s now a more succinct and streamlined flow when a deal turns into a portfolio company and a check is ready to be written. “Our Finance team gets background around how our meetings and interactions are progressing so they can be in the loop and aligned on who's likely to be next in line for deal flow,” says Gomez.

Across the board teams are more proactively notified of updates in Affinity thanks to the Slack integration, which the team uses to update people on opportunities moving forward. The team also uses specific Slack channels that indicate when a company is marked as one of their top priorities so they can stay up to date on how the deal develops.

Using Affinity as a portco/LP matchmaker

Sozo’s team interacts with a broad network of various stakeholders, including LPs, entrepreneurs, people in education, industry experts, and large corporations. With Affinity, all of those interactions are captured in one place. 

This has helped surface additional use cases in the CRM. A primary focus for Sozo is to support their portfolio companies as they expand their presence in Japan. As Gomez explains, “we are often playing matchmaker between different startups and LPs.” Even before an investment has been made, Sozo is already having conversations to get those founders in front of the right people in their global network to see how they can help grow and expand their operations. 

With Affinity, the team creates an Opportunity List where they can pair mutually beneficial LPs and startups together. “Opportunity Lists allow us to have multiple organizations tracked within one record,” says Gomez. “We can go through them and quickly see the C-level point of contact that's driving the relationship, next steps, meeting notes, industry, or proof of concept the company is trying out.” The firm also captures a target list of LPs and companies they haven’t yet introduced so they can move quickly when the time is right.

Fundraising with the firm’s network and knowledge in the room

The mission around helping companies expand their operations globally extends into the firm’s fundraising approach. Gomez shares, “when we want to help startups go international, there's a wide variety of banks, insurance companies, logistics, consumer brands, and different players that are going to be well positioned to help these companies expand.”

When the firm is fundraising, they seek to be intentional about the industries they currently have strong relationships with, and identify gaps to explore in future fundraising rounds. With Affinity, all of that information is available at anyone’s fingertips. 

The availability of up-to-date information is of particular importance to the Sozo team as the majority of its LPs—and subsequent conversations around fundraising—happen in Japan. Because the whole firm can’t join all of their meetings, Affinity enables the team to summarize the status and the important key updates from each of those fundraising conversations in an easy-to-consume format. This includes information such as potential financial range of commitment, progression in conversation stages, and overall probability of investment. This allows for standardization across the board when approaching rounds of fundraising.

Results

A global network managed with a global CRM

With Affinity powering the team at Sozo across two continents, the firm can continue to grow and scale knowing they are working with the same information cross-functionally. “We have greater alignment on the activities people are working on across the different functions of deal flow, fundraising, portfolio support and the areas of focus within the firm, Gomez shares. “I don't think that was possible before we went with Affinity.”

As Gomez and the Investment Operations team look at future ways to implement Affinity, they know the team will continue to achieve success globally with their CRM. “We are now able to communicate on a much larger scale between the different functions within Sozo, and this allows us to be at our best with our entrepreneurs, our fellow GPs and firms that we want to work with, and our LPs.”