Reasons Why The Angel Investors Find The Startups That Use CRM Software Attractive

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No one can deny the significance of the startup investment. Even though there are some reasons behind this investment is always rewarding either in an professional or in a financial way. This infuses the startup with some fresh energy. The startups can even hire people those deploy better infrastructure and even improve the exiting product of the company.

CRM

Few startups even bootstrap their ways of growth. Mos of them need some external investment for scaling up. The angel investors rather than bringing just money, also bring knowledge and some large network which benefits the startup.

The investors always expect something in return. They need reassurance that their investment is not only safe but will even grow exponentially. This assurance comes not from the hollow premises and the complex presentation decks but from the credibility.

Whenever the startup back its claims with the factual data, it establishes its credibility. The tool that builds credibility in the eyes of the various investors is Customer Relationship Management (CRM). The  CRM tool  accelerates the growth of the organizations whether it is a startup or an any other enterprise. The reasons are listed below:

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It displays the monetization strategy.

The most important factor for a startup, apart from its product, is paying customers. Its focus on this parameter dictates its rate of growth.

I’ve met business owners of enterprises with a turnover of over ₹10 crores who didn’t want to deploy a CRM software. They reasoned that they would do it when they got a big order, which showed that they didn’t know how their organization would grow (or even how it had grown).

On the other hand, I’ve met founders of just 5-member startups who deployed a CRM tool even before they expanded their sales team. Their clarity in thinking and confidence was palpable. They set their sights on their goal and were keen on using CRM software to help them achieve it.

Startups don’t use CRM tools just to attract investors. They do it because they want to scale in a structured manner, and want to leverage technology for it. This clarity in thought spells good news for investors, who invest as much in the founders as in the startup itself.

It brings transparency.

Imagine this.

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A startup claiming to have made sales in large volumes but, you cannot validate this with anything except their invoices. Another startup compliments its sales figures with details about interactions with customers. Like a number of visits, purchases made, follow-ups scheduled and so on. Which startup would you invest in?

In the second case, investors feel more assured about the genuineness of the startup. They also have a clearer idea of how their funds will be used and can estimate how much their investment will grow.

A CRM tool brings in transparency. It lays the foundation for trust between the investor and the founders.

It offers a better forecast estimate.

The most important two things those matter deeply for any investor includes the historical performance of the startup and the potential for its growth. The optimally used CRM nearly captures these factors more accurately. It provides details about what the startup has achieved and what is in its pipeline. The founders even use data about the customers and the prospects for preparing the more comprehensive investor pitches. Similarly, such data enables the investors for analyzing whether the startup can achieve the promised numbers. It also helps the founders to justify the potential of the startup.  It also gives the investor more data to making a  calculated decision. Thereby creating  a win-win situation right off the bat.

It makes the startup process-centric.

In order to make  the startup succeed, it must be strong in two different areas those include process and product. The startup with good processes and the mediocre product has scope for improvement. Effectively utilized CRM software ensures that the startup especially the sales team sticks to the process. The team also logs the entries of the visits, follow-ups and the conversions. The study identifies the various ways to shorten the time between the prospecting a lead and the closing sale thereby improving the revenue.  As Peter Drucker had said, “What gets measured gets managed.”

With the meteoric rise in the various number of startups vying for the investment today, the authenticity has become the main consideration point for the investors. This authenticity doesn’t come from flashy presentations and promises or unrealistic Excel-based forecasts.

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