Why Out-Of-The-Box Salesforce Doesn’t Work for Fund Management

The Private Equity and Venture Capital industry have taken leaps forward towards digital transformation due to the pandemic. While the interest in a centralized technology platform has been recorded through surveys for years, it is only recently that more firms realize the necessity of working remotely. The Altvia capital markets platform leverages the best technology to maximize fund management and improve investor relations. Salesforce is a one size fits all solution. While firms can directly install Salesforce, it lacks features that Private Equity and Venture Capital need to run effective operations.

We’ve summarized five significant points to consider before turning to Salesforce for Private Equity and Venture Capital.

1. Salesforce Objects and are Not Specific for Fund Management 

Salesforce out-of-the-box comes with seemingly familiar objects such as Accounts and Contacts but does not include specific, custom objects for fund management like Deals, Funds, Investors, etc. The Altvia product has these objects built into a template so that on day one your team has the pieces it needs to run a capital raise or manage a complex set of funds and investors.

Additionally, the terminology found on Altvia’s platform aligns with the terms most used in the capital markets industry. This was a thoughtful design feature from Altvia’s product team so users can pick up the software and quickly start using it in no time.

2. Salesforce Doesn’t Capture Investor Communication Preferences

Success in Private Equity and Venture Capital is based on the relationships built with LPs and other fund managers. Many of these relationships have special requests or nuances of which all employees at the firm should be aware of.

A popular feature of Altvia’s platform allows users to segment investor contacts into specific lists of funds, making it easy to launch fund-specific emails to recipients. If the firm is using  ShareSecure, Altvia’s LP Portal, investors manage their selections for receiving fund documents — email, portal, or both — and the investor relations professional spends less time managing these communication preferences.

This self-selection option is a favorite and sets firms apart because of the control offered directly to investors.

3. Salesforce Doesn’t Allow for Multiple Investments Under An Account  

Often LPs and GPs make investments into several funds at any one time. The Salesforce generic platform cannot seamlessly manage the one-to-many relationship of a firm making multiple investments in different funds causing the creation of redundant data.

Altvia’s product engineers designed a system that matches the firm’s hierarchy of data and relationships, creating the true ‘Salesforce for Private Equity’ platform.

4. Salesforce Limits Records of Committed Capital and Passed Investment Opportunities the Fund Management Data 

Before committing any capital, LPs and Fund of Fund firms typically review several investment opportunities in their pipeline, including ones passed. Out-of-the-box Salesforce lumps all opportunities into one funnel without giving the option of storing passed opportunities, restricting the ability to analyze data from partners.

With Altvia’s Pipeline feature, firms track funds under a Fund Manager even if the investment wasn’t initially considered. Additionally, because of the custom Fund object, managers are able to easily track both committed and uncommitted capital that is not tied directly to investment.

5. A Customer Success Manager that Understands Private Equity

Salesforce provides countless training materials–video how-to’s, articles, and an online community to ask others for advice or assistance. This works for those who enjoy being self-taught with technology; however, the reality is, most employees juggle multiple tasks and need to be up and running quickly. Altvia provides a named Customer Success Manager to help firms understand best practices and get the most out of the product.

A Customer Success Manager sets any firm up for success including pointing out dashboards for visibility on areas that matter the most, such as current fundraises, investors last contacted, or stages of a current deal. Additionally, during the implementation process, training sessions are set-up and recorded for both power users and specific teams to understand the key pieces to manage at go-live. Finally, ongoing webinars and a community to offer support on-demand.

Altvia’s fully integrated product suite is capable of optimizing the Private Equity firm’s life cycle for deal flow management, investor relations, and fundraising.

Altvia’s investor and deal management product is designed to capture interactions of investor investments, portfolio performance, and back-end systems to scale your growth. Successfully raise and deploy capital, ensure compliance, and deliver a trusted and transparent experience to stakeholders and investors.

View our client case studies to see how Private Equity and Venture Capital firms leverage the platform.

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.

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