3 Ways to Decrease a PE Fundraising Timeline

“Speed has become more valuable than capital.”

Wise words from Henri Pierre-Jacques of Harlem Capital.

That being the case, it’s more important than ever for PE firms to consider how to decrease a fundraising timeline.

Obviously, your success in accelerating the process depends, in part, on factors outside your control, but let’s talk about the things that give you the greatest likelihood of success and which you can control.

Much of the world’s productivity enhancements in the last twenty-five years have become technology, and that should be the first place for you to look, too.

In particular, firms should prioritize the technology that is closest to their most important workflows: raising capital and generating outsized returns.

Three ways to decrease a PE fundraising timeline

1. Develop a deep pipeline and focus quickly on the parts of it most likely to convert.

Start wide and use data to find prospects. Believe it or not, there are investors you’d like to talk to and who would like to talk to you, but neither of you know who the other is (yet!).

Technology’s role is tremendously powerful in this arena and takes shape in two key ways:

1. The data that will help to uncover who those investors are, why they could be a fit, and who you’ll need to interact with. You will almost certainly have to pay for this sort of data and you’ll get what you pay for. Remember that speed has become more valuable than capital, so pay for it and get going.

2. Applications that will help to leverage time to interact with them, keep track of progress, generate reminders, and show engagement activity that will help to inform conversion likelihood.

Turns out those two forms of technology are best used together and doing so will help to inform where conversion is most likely, and 1) which characteristics of the investor and 2) efforts of yours lead to that.

Once you figure this out, find out how to do more of that and do it faster, and technology is the way to do that.

Here are some questions to help get that train of thought going:

  • Who are my top capital raisers?
  • What regions are we most successful in?
  • Where are our best introductions coming from?
  • What are the characteristics of our most committed LPs?

The answers will help you focus your efforts and increase productivity.

2. Automate your processes.

Even simple tasks take time—hours that could be better spent elsewhere.

Consequently, you should automate common workflows like broad email updates, the creation and distribution of PPMs, and the reporting you’ll use to keep track of the process.

In terms of reporting/analysis: account for things you know now that you’ll want to know, but plan to want to report in ways you don’t yet know about.

You should also review ownership/coverage of the prospect universe (including existing LPs) within your team. Then, after completing that review, you can divide and conquer.

Measuring engagement and success will be of help here, too; it will further inform follow-up activities, craft talking points, and focus the activities that offer the least amount of leverage on the things that deserve it and which have the highest likelihood of converting.

3. Prepare key marketing materials, track record, and benchmarks in advance.

For me, just ten or fifteen years ago, the thought of manual but repetitive tasks like these was nauseating.

I’m here to lobby for manual efforts like these being a crime in today’s world.

If for no reason other than that we’ve worked to apply technology to steps like these and you’re wasting precious time given the complexity that comes with manual efforts in this area.

And, of course, when you are fundraising, forward momentum matters. The longer it takes you to close your fund, the less favorably you will be viewed by LPs.

Be sure to have these marketing materials prepped:

  • PPMs
  • Presentation Deck
  • Due Diligence Questionnaires
  • Deal Attribution Analysis
  • Team Background
  • Track Record
  • ESG Policy Statements

With these items completed, polished, and easily accessed, you can ensure there is no long gap between request and response.

Recommendation: Evaluate your internal investor relations capabilities. It may be that you can shorten your fundraising timeline by enlisting the assistance of a placement agent.

The Right Tools for PE Fundraising

Of course, your team will be best able to improve its fundraising performance if it is using solutions designed for PE firms.

From our solution, our leading-edge GP-LP engagement platform, the Altvia suite of purpose-built tools has all the necessary functionality in systems that are also intuitive and easy to use. Click here to see them in action.

Wise words from Henri Pierre-Jacques of Harlem Capital.

That being the case, it’s more important than ever for PE firms to consider how to decrease a fundraising timeline.

Obviously, your success in accelerating the process depends, in part, on factors outside your control, but let’s talk about the things that give you the greatest likelihood of success and which you can control.

Much of the world’s productivity enhancements in the last twenty-five years have become technology, and that should be the first place for you to look, too.

In particular, firms should prioritize the technology that is closest to their most important workflows: raising capital and generating outsized returns.

Three ways to decrease a PE fundraising timeline

1. Develop a deep pipeline and focus quickly on the parts of it most likely to convert.

Start wide and use data to find prospects. Believe it or not, there are investors you’d like to talk to and who would like to talk to you, but neither of you know who the other is (yet!).

Technology’s role is tremendously powerful in this arena and takes shape in two key ways:

1. The data that will help to uncover who those investors are, why they could be a fit, and who you’ll need to interact with. You will almost certainly have to pay for this sort of data and you’ll get what you pay for. Remember that speed has become more valuable than capital, so pay for it and get going.

2. Applications that will help to leverage time to interact with them, keep track of progress, generate reminders, and show engagement activity that will help to inform conversion likelihood.

Turns out those two forms of technology are best used together and doing so will help to inform where conversion is most likely, and 1) which characteristics of the investor and 2) efforts of yours lead to that.

Once you figure this out, find out how to do more of that and do it faster, and technology is the way to do that.

Here are some questions to help get that train of thought going:

  • Who are my top capital raisers?
  • What regions are we most successful in?
  • Where are our best introductions coming from?
  • What are the characteristics of our most committed LPs?

The answers will help you focus your efforts and increase productivity.

2. Automate your processes.

Even simple tasks take time—hours that could be better spent elsewhere.

Consequently, you should automate common workflows like broad email updates, the creation and distribution of PPMs, and the reporting you’ll use to keep track of the process.

In terms of reporting/analysis: account for things you know now that you’ll want to know, but plan to want to report in ways you don’t yet know about.

You should also review ownership/coverage of the prospect universe (including existing LPs) within your team. Then, after completing that review, you can divide and conquer.

Measuring engagement and success will be of help here, too; it will further inform follow-up activities, craft talking points, and focus the activities that offer the least amount of leverage on the things that deserve it and which have the highest likelihood of converting.

3. Prepare key marketing materials, track record, and benchmarks in advance.

For me, just ten or fifteen years ago, the thought of manual but repetitive tasks like these was nauseating.

I’m here to lobby for manual efforts like these being a crime in today’s world.

If for no reason other than that we’ve worked to apply technology to steps like these and you’re wasting precious time given the complexity that comes with manual efforts in this area.

And, of course, when you are fundraising, forward momentum matters. The longer it takes you to close your fund, the less favorably you will be viewed by LPs.

Be sure to have these marketing materials prepped:

  • PPMs
  • Presentation Deck
  • Due Diligence Questionnaires
  • Deal Attribution Analysis
  • Team Background
  • Track Record
  • ESG Policy Statements

With these items completed, polished, and easily accessed, you can ensure there is no long gap between request and response.

Recommendation: Evaluate your internal investor relations capabilities. It may be that you can shorten your fundraising timeline by enlisting the assistance of a placement agent.

The Right Tools for PE Fundraising

Of course, your team will be best able to improve its fundraising performance if it is using solutions designed for PE firms.

From our solution, our leading-edge GP-LP engagement platform, the Altvia suite of purpose-built tools has all the necessary functionality in systems that are also intuitive and easy to use. Click here to see them in action.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like Salesforce.com have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that Salesforce.com has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that Salesforce.com — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.