Vendor Management Is Broken in Most VC Portfolios. Here’s How to Fix It.

If you're leading a VC platform or supporting portfolio operations, you're probably juggling founder support, hiring help, strategic introductions, and a dozen other moving parts. But there's one area that still gets managed in spreadsheets, Slack threads, and one-off emails: vendor management.

It’s unglamorous. It’s chaotic. And it’s costing your portfolio companies serious time and money.

Now, most teams focus on other aspects of fund management that more obviously affect the overall VC fund's performance, investing in tools like portfolio monitoring solutions and fund performance data trackers to keep a pulse on how things are going. But very few stop to consider that business development, deal management, due diligence, and other essential functions can all be tied back to vendors.

Is a potential acquisition bleeding money through unsavory contracts with suppliers, making them, in actuality, one of the less valuable investments your firm could undertake? Or are a current portfolio company's costs ballooning in a short period of time due to changes in their supply chain instigated by economic volatility? Maybe portfolio insights are revealing strikingly similar inefficiencies across companies that relate to their back-office operations.

All of these considerations underscore the importance of vendor management for venture capital firms and their platform teams.

The fast-paced world of angel investors and venture capitalists requires you to run a tight ship. Investors demand good returns; industries are disrupted daily. You can't afford to fall behind because of internal problems.

And that's why we're diving straight into the dark, chaotic, and often unappealing underbelly of portfolio operations.

This guide breaks down why vendor management should be a core focus of your platform strategy, how the right software can make it scalable, and why the strongest VC platforms are building centralized, insight-driven systems to fix it.

Why Vendor Management Deserves More Attention from Platform Leaders

When a portco needs a HR tool, legal partner, or SOC 2 compliance vendor, where do they go?

• If they’re early-stage, they might pick the first name someone drops in a Slack group.
• If they’re later-stage, they might default to whoever they used in a past job.

The result: duplicate spending, missed deals, unclear performance tracking, and hours wasted on sourcing vendors from scratch.

This isn’t just a founder problem; it’s a platform problem. And it’s one that can be fixed.

What Makes Vendor Management So Broken in Most Portfolios?

Most portfolios are flying blind when it comes to vendor management. And the cost isn’t just lost efficiency in portfolio performance. It’s friction, waste, and missed opportunity.

Here’s what platform leaders are dealing with every day:

• Redundant research: Founders are constantly asking, “Do we know a good X?” even though someone in the portfolio already solved that problem six months ago. There's no central record of who used what or whether it worked.
• Wasted time: Platform teams spend hours replying to the same vendor intros, pulling links from scattered Notion docs, or triaging one-off Slack messages. That’s time that could be spent on strategic support.
• No pricing leverage: Without visibility into vendor overlap, your companies miss out on collective buying power. The same CRM might be used by six portcos, all paying full price. (Or worse, all paying different prices...)
• Lack of accountability: Once a vendor is picked, there’s no easy way to track whether they performed, since no one documents the fulfillment process. Did they deliver on time? Were they responsive? Would the team use them again? No one knows.
• Slower execution: Every new vendor decision restarts the process from scratch. RFPs, referrals, demos. Meanwhile, startups lose momentum and burn through cash.

 Vendor selection shouldn’t feel like Groundhog Day. But in most portfolios, that’s exactly what it is.

The Case for a Centralized Vendor Management Layer

Treating vendor management as a shared service isn’t just about convenience, it’s about creating real operational leverage across your portfolio.

Here’s what changes when you centralize vendor selection, visibility, data, and performance tracking:

1) Deal Visibility Across Your Portfolio

Right now, vendor relationships are scattered. One team might be using a design firm that crushed it, but no one else knows. Another might be overpaying for software that another portco negotiated a better deal on.

With a centralized system, platform teams can see:

• Who’s using what
• How it’s performing
• What it’s costing

This visibility lets you spot patterns, identify underperforming vendors, and help your companies avoid the same mistakes.

Learn more about tech stack and how to help your portcos choose the best ones for their needs: Instant download

2) Pre-Vetted Vendors Built for Startups

Not every vendor is built for early-stage chaos. Some require too much overhead. Others can’t scale.

When vendor management is centralized, you can build a curated list of vendors that actually work for your companies' size, stage, and budget.

It also cuts down on guesswork. Instead of every company starting from scratch, they can tap into collective intelligence, streamline processes—and move faster.

3) Bulk Purchasing Power You Can Actually Use

When five of your companies use the same payroll provider, there’s pricing power on the table. But most firms never capture it, because no one’s tracking usage or coordinating deals.

A shared platform turns those fragmented purchases into leverage. It’s the difference between paying retail and getting preferred pricing without needing to renegotiate every time. This is one of the ways smart private equity firms get an advantage over the rest.

4) Time Savings for Everyone

Founders don’t have time to vet 5 vendors for every function. Platform teams don’t have time to manually manage vendor docs, intros, and feedback. When vendor management is centralized, you create one place to search, compare, and select with little to no effort.

The result? Less back-and-forth. Fewer one-off requests. More decisions made with confidence.

5) From Ad Hoc to Repeatable

Most vendor decisions in VC portfolios are ad hoc. Whoever someone used before, or whatever name pops up first, is the choice. That model doesn’t scale with PE firms in general and VC funds in particular. It holds them back.

A centralized system turns vendor selection into a repeatable, trackable process:

• Requests are logged
• Options are shared
• Feedback is captured
• Results are measured

This turns vendor management from a distraction into a discipline, and a real source of value creation.

Why Legacy Tools Like Spreadsheets, Notion, and Airtable Fall Short

Most platform teams didn’t set out to manage vendors in Google Sheets. But when you're juggling intros, requests, and referrals on the fly, it’s the default move.

Notion, Airtable, and spreadsheets can feel flexible at first, but that flexibility comes at the cost of scale, consistency, and visibility.

Here’s why they break down:

They’re Not Searchable or Scalable

What starts as a clean Airtable eventually becomes a graveyard of half-filled rows, outdated contacts, and one-off notes. Searching for a "reliable data privacy consultant" becomes a game of keyword roulette, with no assurance that the information is current or useful.

And when your portfolio doubles in size? These tools don’t evolve. They get messier and more error-prone due to manual data entry issues.

They Don’t Track Usage or Performance

There’s no way to know:

• Which vendors are actually being used
• Whether the experience was good or bad
• If a contract is still active or expired

That means every new vendor request restarts the cycle of guessing, vetting, and hoping, wasting hours that could have been avoided with better tracking.

They Can’t Show You What’s Saving (or Costing) Money

You can’t calculate ROI on a spreadsheet if no one logs savings, redemption activity, or shared deals. And most teams aren’t consistently updating vendor discounts or performance outcomes because there’s no built-in incentive or workflow to do so.

So while those tools might feel “free,” they cost your team time, clarity, and leverage. 

Ready to unlock a better and more streamlined solution? See What Proven Can Do For Your Portcos!

Why You Need a Purpose-Built Vendor Management Platform

If you want a system that evolves with your portfolio and adds real value as you grow, you need software built specifically for vendor visibility, selection, and optimization.

A great vendor management platform should:

1) Capture and Surface Vendor Usage Across Companies

• Who’s using what, where, and why
• Built-in tagging, filtering, and real-time updates

2) Automate Onboarding, Tracking, and Feedback Loops

• Reduce time spent chasing vendor info
• Collect performance data without adding extra work
• Close the loop between vendor choice and outcome

3) Give Founders a Self-Serve Experience, with Platform Visibility

• Let companies browse and compare options
• Provide clarity without having to manage each request manually
• Surface trusted vendors without micromanaging the decision

(Bonus points if you can get interactive dashboards, too. They make managing the back-office much easier.)

What to Look For in a Vendor Management Platform

The right tool doesn’t just store vendor names. It becomes an extension of your platform strategy.

Look for a solution that:

• Provides real-time insights into vendor adoption, usage, and ROI
• Enables cross-portfolio sharing of trusted vendors and internal reviews
• Includes pre-negotiated deals across key verticals (HR, finance, compliance, marketing)
• Is intuitive enough for early-stage teams, but powerful enough for growing ops
• Tracks and reports savings at the portfolio level—so you can prove impact

Anything less is just another version of the same spreadsheet (just, maybe, with automated data collection). No one needs another pain in the tech stack.

How Proven Solves the Vendor Management Problem for VC Platforms

Proven is built for platform teams who want to professionalize and simplify how their companies find, select, and manage vendors.

With Proven, you can:

• See what vendors your portfolio companies are using in real-time
• Share internal ratings and reviews across teams
• Give your companies access to exclusive, pre-vetted deals from leading providers like AWS, HubSpot, and more
• Automatically track redemptions and estimate cost savings across the fund
• Provide early-stage teams with clarity and structure from Day 1

Whether your platform team supports 5 companies or 50, Proven helps you scale the vendor selection process without reinventing it every time.

Conclusion:

The VC firms that win aren’t just the ones with the biggest networks or best brands. They’re the ones that operationalize value for their founders and provide a complete suite of resources to help them grow.

And that's why venture capital management software across the deal and management phases has become a cornerstone of smart investment management.

Most platform teams are too busy to notice just how much time, money, and momentum gets lost in fragmented vendor decisions. But when you centralize this one layer, everything gets easier: faster onboarding, smarter choices, shared learnings, and measurable savings.

You don’t need another spreadsheet. You need a system. You need the right vendor portfolio management software that gives you quick and easy access to what matters while being built to scale.

That's Proven. It's designed for visibility, high growth, and the realities of startup operations.

Vendor management isn’t just admin work. It’s operational leverage hiding in plain sight. That's why you need to take charge of it.

Ready to centralize vendor operations across your portfolio? 👉 Try Proven for Free or Estimate Your Portfolio Savings

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