How do you successfully evaluate hundreds of complicated technologies each year, with a team spread across the country and resources that span the globe? This was the challenge that VIC needed to solve back in early 2019: Take our Opportunity Assessment (OA) process to the next level. At that time, VIC’s OA team used a complicated Excel spreadsheet and Dropbox to support its due diligence process. The problem? It was challenging to organize, finding relevant documents was hard, and keeping track of the discussions, action items and other contextual information for every technology in the pipeline became increasingly daunting. Needless to say, the approach would not scale with our goal of increasing the volume deal flow and pace of screening.
VIC needed a simple and intuitive way to track the due diligence process, conversations with the inventors and tech transfer offices, research, and patents that were key to vetting a technology. Most importantly, we needed to share all that information with our remote OA team. As detailed in an earlier article [Digital Best Practices for Investor Groups], we had already begun to implement HubSpot for our CRM and Marketing Automation needs, but also wanted to use HubSpot to improve our OA efforts if at all possible. Since our process was somewhat unique, we were unsure if HubSpot had a pre-existing option that would meet our needs without requiring expensive and time-consuming third-party customization.
After vetting HubSpot’s capabilities, we created a custom pipeline in the Sales Hub, allowing us to visually move a technology through our deal stages, track it, and have all the information accessible to our team. A technology typically starts in the “Initial Screen” stage, where our team reads a brief overview and makes a go/no go decision based on first impressions. If it does not get a good score (an average of at least 3 on a scale of 1-5), we archive it and move on. This allows us to focus our efforts on technologies that the majority of the team agrees are viable while still retaining the relevant information should conditions change that make re-evaluation appropriate.
If technology passes the initial screen, it moves to the “Prospect” stage, at which point we gather as much supporting information as possible from a variety of sources: inventors, technology transfer offices, peer-reviewed scientific publications, trade articles, patents, market research, etc. In this phase, we utilize the second part of our OA organizational structure: Dropbox. We chose to store our essential documents in Dropbox for two reasons: 1. It is effortless to organize and securely share large quantities of files with distributed teams; and, 2. If we ever decide to move from HubSpot to another system, all of our documents are accessible through the new solution.
One of the elements that makes HubSpot so ideal for Opportunity Assessment is how it facilitates project collaboration. Our OA team consists of 13 people in 7 states that all need to evaluate and contribute to the due diligence process. With HubSpot, every team member can read tracked emails, review notes from phone calls, schedule tasks, and use the Dropbox link to access all the supporting documents. This is essential for success, and the HubSpot/Dropbox combo makes this possible.
Why is all of this so important? It allows our dispersed team to efficiently and effectively make informed go/no go decisions on hundreds of technologies per year. Using this approach already has paid dividends in the first half of 2020: Forming two new companies and moving six technologies into the VIC Foundry. Equally beneficial is that we can easily see which deals we decided not to move forward with and why.
We are now beginning to use HubSpot for other activities beyond opportunity assessment, including managing our pipeline of grant proposals, as well as tracking portfolio company fundraising outreach. Beyond our specific opportunity assessment requirements, the HubSpot "deals" function could be a powerful tool for other uses; we continue to explore the use of HubSpot for project management, partnering evaluation, and due diligence.
To learn more, visit: victech.com/innovators