We’re happy to share the latest in AltsTech’s series profiling how investment managers are using AI, tech, and analytics to generate alpha. We’re fortunate to interview Susan Akbarpour, Managing Partner, Candou Ventures.
Susan is the founder of multiple SaaS platforms. She serves on the boards of several AI startups and nonprofits, including the KQED Public Media Network and her own organization, Democracy 3.0. A strong advocate for transparency and sustainability in the enterprise software space, Susan also teaches Product Design for Impact in master’s programs, inspiring numerous platforms to adopt these principles. Additionally, she has established a fellowship in her name at Stanford GSB, her alma mater.
David Teten: Please give us an overview of your firm.
Candou Ventures is an early stage fund in Silicon Valley with $150m AUM focusing on deep tech, AI and enterprise software.
David Teten: Who are Candou’s peers/competitors, and how do you differ?
SPV-driven funds like Candou face competition from traditional venture capital firms, angel investors, equity crowdfunding platforms, and micro-VC funds. Traditional VCs typically manage large capital pools and invest across a spectrum of startups. They often favor larger, lower-risk investments at later stages to satisfy LPs who probably prefer not to pay management fees over extended periods. Angel investors, meanwhile, are usually individuals or small groups investing personal funds in early-stage startups. Equity crowdfunding platforms democratize investment by enabling smaller investors to pool resources but might not have the expertise or resources to conduct in-depth due diligence. While platforms do some vetting, it may not be as thorough as that performed by experienced VC firms or SPVs, potentially increasing the risk for investors. While micro-VC funds compete directly with SPVs by targeting early-stage, high-potential startups with agility, they typically operate with smaller capital pools compared to larger VCs or well-structured SPVs. This limitation can restrict their ability to support startups through multiple funding rounds, provide substantial follow-on capital, or gain control and oversight through board seats.
David Teten: How does Candou differentiate itself in this competitive environment?
Candou stands out by offering greater flexibility compared to traditional VC structures. Our limited partners can invest selectively in specific companies rather than a broad portfolio. This targeted approach allows more diverse accredited investors—especially those with smaller check sizes—to access thoroughly vetted opportunities. This model not only democratizes venture capital but also enhances our attractiveness to investors and startups alike.
David Teten: What benefits do startups gain from partnering with Candou compared to traditional funding rounds?
Partnering with Candou provides startups with swift access to capital, essential in rapidly evolving markets. This speed allows startups to seize opportunities promptly. Our SPV limited partners have a direct stake in the companies they support, fostering alignment and robust backing. We typically take board seats to assist with governance and strategy, staying involved through Series A and sometimes beyond if founders find our involvement beneficial.
Receiving investment from Candou means more than just capital; it’s about strategic network support. Unlike rounds with complicated cap tables due to multiple small checks, we provide streamlined, focused funding. Our network comprises investors committed to the startup’s success, providing not only financial resources but also invaluable connections and advice. This strategic focus and agility make Candou an effective catalyst for innovation and growth in the startup ecosystem.
David Teten: Can you elaborate on your fee structure?
At Candou, we don’t charge management fees. We charge a minimal one time 4% admin fee instead, to cover the SPV’s accounting, legal and operational cost, which even our general partners pay, as they co-invest alongside LPs at the same minimum levels. Our performance-based fee structure, centered on carried interest, aligns our success with the success of our investors and SPVs. Thanks to the development of the CIMA system, an end to end Fund management platform that captures the entire deals’ lifecycle, we automated the complex back-office functions of our SPV drive fund, allowing us to maintain lower operational costs compared to both large VC funds and even other SPVs.
David Teten: What’s your background? How and why are you in your role today?
As an entrepreneur, investor, and philanthropist, I’ve had the privilege of wearing many hats. I hold a graduate degree in Management from Stanford GSB, and I’ve founded five “products for impact”, leveraging technology to drive positive societal change. I’ve also served on nine boards, including four AI companies and KQED Network (NPR affiliated). I teach university courses on “Product design for Impact” and “Investing in Products for Impact”.
The Frustration of Traditional Fund Management
As an angel investor and LP in multiple funds, I’ve always sought transparency in my investments. I want to know where my money is going and what my returns look like. However, I’ve often found myself drowning in a sea of paper documents and PDF reports from fund managers. It was like searching for a needle in a haystack to get a clear picture of my investments.
The Genesis of CIMA
When I became the Managing Partner of Candou Ventures, I was determined to leverage technology to streamline our fund management processes. However, I was frustrated by the need to log in to multiple tools and deal with data silos. There had to be a better way. We chose to invest in creating a platform that would provide LPs, like myself ,with a clear, concise, and visual representation of their investments in real time.
CIMA is an independent entity and platform separate from Candou Ventures. We are the early adopter customer. Candou helped CIMA to validate the product market- fit (PMF), and today serves as a reference customer and case study in their commercialization efforts. Two managed family funds within Candou, including my own, have invested in CIMA ensuring independence from Candou Ventures.
CIMA FUNDMASTER is a software company founded by repeat tech entrepreneurs and venture capital veterans. The company has developed a comprehensive fund management platform designed to streamline the investment process for SPV driven funds, traditional venture capital and private equity firms. This platform offers a range of tools and services to support the entire investment lifecycle from sourcing and due diligence to portfolio management and investor relations. With a single view of data, and focus on automation, customization, and transparency, CIMA aims to provide a fluid and seamless experience for fund managers and their LPs alike.
A Collaborative Effort
While CIMA began as my brainchild, its development was a collaborative effort involving several talented individuals. Our CFO, with experience running two public companies and multiple major funds, contributed deep insights to our algorithms. Our legal team provided crucial guidance on fund management complexities. Additionally, our partners enhanced the business logic woven into CIMA, and our venture partner, the founder of SVCIT, has played an integral role. This exceptional team, which achieved a MOIC of 19.54X with our first fund, significantly contributed to shaping CIMA.
A Platform Built by Fund Managers, for Fund Managers
According to the Institutional Limited Partners Association (ILPA), many LPs struggle to accurately determine their total investments and multiple on invested capital (MOIC). Despite ILPA’s advocacy since 2011 for consistent and transparent LP-level disclosures, the venture capital (VC) industry has lagged in prioritizing robust LP-facing reporting solutions.
CIMA is more than just a platform – it’s a reflection of our collective expertise and passion for innovation. The team understands the challenges that fund managers face, and designed this platform to address those challenges head-on. With CIMA, fund managers can streamline their investment process, improve efficiency, and drive growth. And for LPs like myself, CIMA provides a simple, visual way to see where their money is going and what their returns look like.
David Teten: Who are CIMA’s peers/competitors, and how do you differ?
CIMA’s primary competitors include platforms like Carta, Juniper Square, and Affinity. However, CIMA distinguishes itself through an all-inclusive service suite that combines automation, customization, and operational efficiency, with transparent, flat pricing starting at just $100 per month. Unlike others, we don’t base fees on Assets Under Management (AUM). Think of it like buying a phone plan—why should it cost more just because you have a higher balance in your account? Our software’s purpose is to support fund managers, not to adjust pricing based on arbitrary asset size.
Our approach focuses on empowering emerging fund managers by offering the same robust automation features to firms of any size, from small angel groups to large funds, without the high fees. CIMA’s platform integrates smoothly with other tools fund managers already use, and we offer extensive educational resources, such as tutorials, case studies, and tips, to help users develop essential skills and knowledge.
Where platforms like Carta were built with founders in mind, CIMA is purpose-built for fund managers and LPs. Our platform provides a more transparent, efficient, and affordable experience, particularly valuable for emerging funds and SPVs. We offer automation and data-driven insights directly on mobile, enabling fund managers to access MOIC, detailed LP data, and more in seconds, empowering them to focus on strategic growth.
In short, CIMA provides comprehensive support, efficient fund management, and flexible customization at a fraction of the cost of other platforms.
David Teten: What are the tools you’re using for your front office: sourcing, LP relations, investing analysis, etc.? What are the strengths and weaknesses of these providers?
We primarily use Ninja Tech’s AI research agent and Signal Rank’s proprietary AI algorithm for our due diligence. Both of these tools are part of the Candou Ventures portfolio. Additionally, the Signal Rank algorithm will soon be available to our customers through CIMA.
We’ve streamlined our operations by consolidating our tools and processes onto the CIMA platform. Previously, we used a patchwork of systems, including and Assure which went bankrupt and left us without access to our data. We also relied on Monday for pipeline management (very expensive and residing in a silo), Mailchimp for CRM, and Carta for cap table management. Our file system was scattered across Dropbox and Google Drive. The AUM-based pricing model of some of these tools was also inflexible and didn’t meet our needs.
These systems were point solutions which did a decent job in their narrow band but there was a lack of cohesive single-view-of-data approach to a comprehensive fund management software. That was the problem that CIMA sovled. .
David Teten: What are the tools you’re using for supporting your Limited Partners? What are the strengths and weaknesses of these providers?
Not surprisingly, CIMA has been our tool of choice in this area as well. We improved our LP Net Promoter Score (NPS) from 30+ to 90+ and our Capital call notice period was reduced from 20 days to 2 hours!
David Teten: What technologies/databases have you found helpful in winning LPs? (I wrote about this in Why Isn’t Sales As Efficient As Online Dating and Fundraising hacks for VC and private equity funds.
We really don’t use any tools because our fund strategy focuses on working within a close-knit network. We don’t believe in mass marketing to attract LPs, as we can only have 99 and want to be selective. Honestly, I think most firms, except for angel groups, might be in the same situation. It’s similar to high-fidelity enterprise sales. However, sustaining LPs relies on continuously demonstrating value, and that’s where CIMA has made our job much easier.
Given the importance of trust and confidentiality in our relationships with LPs, we don’t rely on public databases or technologies to win them over. Instead, we focus on nurturing our existing network and leveraging the strength of our personal connections to grow our fund.
Word-of-Mouth and Referrals
Our LPs are often referrals from within our existing network, and we’ve found that word-of-mouth recommendations are a powerful tool in building credibility and trust. By delivering exceptional results and maintaining a high level of transparency and communication, we’ve created a loyal community of LPs who are eager to recommend us to their peers.
Trust, Transparency, and Results
Ultimately, winning LPs is about building trust, demonstrating transparency, and delivering results. With CIMA, we invested to demonstrate our commitment to maintaining the highest standards of integrity and professionalism, and we believe that our personal approach, combined with our cutting-edge platform, sets us apart in the industry.
David Teten: What are the tools you’re using for your middle office: tracking, risk management, etc.? What are the strengths and weaknesses of these providers?
CIMA’s platform provides a comprehensive suite of tools and services for the middle office, including portfolio monitoring, compliance tracking, and risk management. This platform’s strengths lie in its ability to deliver real-time data and insights, automate manual tasks, and facilitate seamless collaboration and communication among fund managers, accountants, and auditors.
A key strength of CIMA software is its ability to provide a single view of data, enabling users to access and analyze information from a unified dashboard. This ensures consistency and accuracy in decision-making and enhances the overall efficiency in managing complex financial operations.
David Teten: What are the tools you’re using for your back office: settlements, records maintenance, accounting, human resources, etc.? What are the strengths and weaknesses of these providers?
CIMA allows us to create customized types of users with restricted access to different datasets in our business and keeps track of their access and profile information. For other back-office needs, such as settlements, records maintenance, and accounting, we rely on CIMA. It handles all distributions, limited partners’ payouts, funds, GPs’ carry, and interest from our investments, including warrants, preferred, and common stocks.
Strengths of CIMA include its ability to automate complex calculations and maintain accurate records, which saves us time and minimizes the risk of errors. However, a potential weakness could be that it may not cover other specific back-office needs. To address this, we have invested heavily in a dedicated team that we incubated out of Candou to establish CIMA as an independent entity, allowing us to continually add features, capabilities, and integrations.
David Teten: A huge amount of valuable data flows through your pipes. What are you doing to capture that data and mine it? Can you share any patterns you have identified?
By consolidating data from multiple silos into a single, powerful platform, we are excited to introduce an innovative feature leveraging AXYS—a Candou portfolio company. This feature offers our customers several key benefits:
– Seamless Data Migration: Our system facilitates the effortless transfer of data from existing tools, platforms and file systems into CIMA, simplifying the onboarding process for new customers and managing migration complexities effectively.
– Unified Data Interface: Customers can retain their data in its original locations while connecting it to access CIMA’s comprehensive suite of tools and analytics. This integration facilitates seamless interaction and management of data across various platforms, offering a cohesive and unified data management experience by consolidating all data into one platform for tasks such as searching, analyzing, and promoting insights effectively.
With this integration, CIMA’s customers, including Candou, its inaugural client, will be empowered to discover patterns in investor behavior, market trends, and portfolio performance. These actionable insights are invaluable for making informed investment decisions, enhancing operational efficiency, and driving business success.
David Teten: Do you see any room to use AI to exploit your dataset? If so, what are you doing to move that forward?
We have discovered that utilizing automation and AI-powered tools can significantly expedite due diligence for Candou fund managers and CIMA’s customers. These tools streamline the process, minimize manual errors, and offer real-time insights into portfolio companies. CIMA team is nearing the completion of integration with several third-party providers, including two of our own portfolio companies, to launch a new capability called INVEST IQ, which will be instrumental in accelerating due diligence. By analyzing these patterns, fund managers can identify emerging trends and potential success indicators, enabling them to pinpoint startups with a higher likelihood of future success. This predictive capability empowers fund managers to make informed investment decisions and strategically position their portfolios for maximum growth and innovation.
David Teten: What are the most creative or unusual ways you’re using AI & analytics in your organization?
Using AI-powered tools to identify future unicorns! I can’t offer you more details but they are working on it!
David Teten: What are your unmet technology needs? Places in your firm where you’re seeking a solution and haven’t found an appropriate one?
We are fortunate to have CIMA, as it truly empowers us and meets almost 100% of our needs.
David Teten: What processes are you focused on improving?
We improved our LP Net Promoter Score (NPS) increased from 30+ to 90+ and our Capital call notice period was reduced from 20 days to 2 hours!
We aim to eliminate or reduce bias from our due diligence processes, and the CIMA team has included this goal in their roadmaps as well.
