Digital Tools in Angel Investing

March 26, 2019

By: Dennis Ensing

For an individual angel investor, email and LinkedIn, an Excel spreadsheet could probably be sufficient to manage one’s investments. With these three simple tools you can track deal pipelines, gather due diligence feedback, or keep track of portfolio activity.

In 2018 SWO Angels screened over 250 individual investment opportunities. We undertook due diligence on 26 of these ventures and they were presented to our members in 10 Investment Meetings held during the year. As a result of all that work, by the end of the year 13 investments were closed in 12 ventures for a total of about $2.2 million, which was leveraged by an additional $7.9 million from other investors into those ventures.

Now, after the first 10 years of our Group’s activity there are more than 25 companies in our members’ collective portfolios, many of which have raised multiple rounds of financing.

With the success of our alliance with Angel One and GTAN to simultaneously syndicate our deal flow, the demand is even greater for the best apps and workflows to help us from deal sourcing to collaborating to portfolio tracking.

A much longer post would be necessary to provide an evaluation of the various tools we use. This one will simply mention the categories and how we both currently use them or might intend to implement changes.

The front office of our angel group is the funnel to track deal pipeline. Customer Relationship Management (CRM) tools like Salesforce or Zoho work well for this. Platforms such as LinkedIn, AngelList or Gust can then be used to supplement research, vetting, and tracking. Then there are company research platforms like FundingPortal, DealHall, Mattermark and others who provide deal intelligence, comparables, and more.

We have tried to integrate some of this on a member communications platform to facilitate the necessary collaboration, interaction and communication once a company passes the early tests of screening, but that has not been very successful. In 2018 we split that up again and now carry basic member relationship management through Membee and leverage Eventbrite for event registrations and communication. Email, together with a tool like Dropbox, are already so prevalent and seamless that trying to tie them together with other aspects of our deal management and due diligence process was asking too much.

Once investment has been made and you want to pro-actively monitor your portfolio – what is the right level of information to gather continuously and where do you keep it? Hockeystick.co is a Canadian angel-funded venture that has company tracking portfolio tools. Key performance indicators are critical to monitor, including months of cash remaining, sales pipeline, MRR, projected revenue, and other company-specific KPIs. Hockeystick has been collecting this data for several years now on behalf of many partners in the eco-system and developed a nice database that they also recently opened up through their web site. It’s worth a look!

If you have other suggestions of useful tools for any part of the workflow I have given an overview of, I would like to hear about them. Please send to dennis@swoangel.com. Thank you!