The Technology Behind Good Capital (Part 1)
This is part of a 3 part series that we are sharing with our LPs through our newsletter, India Technology Review (ITR)
We make just 6-8 investments a year, cherry-picked from over 2,000 companies we evaluate. This guardrail drives our high-conviction investing approach. However, narrowing down from 2,000 requires a lot of confidence to be sure we’re picking the best 7.
Today, I want to tell you about the technology and processes that enable the investment team to focus our time & energy on the most promising companies at the final leg.
Capturing information
Our information capturing is designed to reduce the effort it takes to get information into our central "Good Capital brain". This means we’ve created every type of channel – WhatsApp, email, voice notes, screenshots, links, website – through which we ingest information from our team and network:
Once ingested, information is organized and updated on our central Airtable database. This means:
Notes from each interaction are captured
2. Stages of a deal (or other opportunity) are re-categorised based on new context (see next)
3. Follow-ups are either automatically carried out, or assigned to team members via Asana (our task management system)
This information is centrally organized on our Airtable database, where it is ready for further analysis.
Managing Investment Opportunities
Pipeline configuration
Depending on how far along we are in decision-making, we place deals into certain stages:
Triage: filtering the Signal from Noise
As we filter deals through the top of our pipeline (where volume is highest), we triage at 2 levels:
First, we’ve configured an AI prompt to automatically do the first level of screening. It "green-lights" (based on predefined criteria) the suggested stages that a deal should go into in order to narrow down the deals for more digestible action.
2. Second, our head of investment operations, reviews these suggestions and assigns stages based on her review. Her KPI goal is that there should never be > 50 deals in a Lead stage, or > 30 deals in a Qualified stage.
Promising deals then get a human touch, with our investment team scrutinizing them further to decide if they warrant deeper diligence.
Weekly “Capital Huddles”
Our Tuesday Capital Huddles are the nerve center of deal evaluation. We turn the pipeline upside-down and start with deals in “Decision Time”, those which are closest to final decision-making.
As seen above, the Huddle consolidates all key information about each deal.
Deal discussion process
As a policy, no deals are allowed to be discussed unless presented with a “one-pager” analysis by a team member. At this point, other colleagues read through, submit written comments on the collaborative document, and only then do we open the floor to dissect the potential for each opportunity.
Through this adversarial process, these documents synthesise key insights, flagging areas for further probing, and eventually become our final investment memos.
Technology is our silent enabler through this process. Our platform auto-tags action items, sets reminders, and assigns next steps to deal team members, ensuring thorough follow-ups.
Tracking deals
Deals that have undergone some evaluation stay in our "Second Screen" pipeline. This includes companies our analysts find promising or those that came in through our GPs' direct networks. We continue tracking their progress, engaging founders, and sharing relevant insights, so we're ready to dive in when we’ve witnessed a long enough tapestry of the founding team to make an informed decision.
Our multi-layered diligence approach helps us peel the onion gradually, rather than biting off more than we can chew. Declined deals are bucketed as "Backburner", "Missed / Not Invested", or "T-45/90" based on their reason for passing and potential for a revisit.
Closing investments
Once decisions have been made, work shifts to the operations team. Naturally, we have standardized checklists to ensure that all bases are covered, while integration with Asana keeps everyone aligned on deliverables and deadlines.
Meanwhile, reporting dashboards give the investment team a grasp of progress at all times.
More than just Deal Flow
Deal evaluation may be the bread and butter of venture capital, but it's just one slice of the investment pie. Like a savvy portfolio manager diversifying assets, we've spread our technological wings across the entire investment lifecycle. From sourcing to closing, our systems work in concert to keep the gears of Good Capital turning smoothly.
In our next issue, we'll peel back the curtain on how technology powers our portfolio onboarding and management. You'll see how we leverage our digital toolkit to transform freshly-minted investments into thriving partnerships.
