Of all the symptoms of organizations that need a new fund management software system, perhaps the most common is that they currently manage all of their fundraising and investing in Excel spreadsheets. Excel is a great way to analyze data and is fairly robust in creating reports, but for performing functions related to fund management, it has its limitations.
Most Private Equity firms using Excel to manage their funds will store giant Excel workbooks on a shared drive and let their employees access the document to edit and add information to it. Invariably with this arrangement, multiple versions of the document get created and the validity of the data is compromised. Also, most organizations do not have measures in place for tracking what changes were made and by whom. So when data is incorrect, missing, or otherwise corrupted, there is no way to determine the source of the problem. Switching to a private equity software solution will make you more efficient in both fundraising and deal sourcing. With AIM, you can more effectively track potential investors and easily communicate with existing LPs. On the deal side, AIM lets you share due diligence and record details from each step in the due diligence process, ultimately letting you increase deal flow in a scalable manner.
The example of why you need to switch to a fund manager software comes from a client who was required to produce a list of everyone who received a PPM from their firm. Many times an organization will have sent out 100 PPMs, 30 of which are tracked in one spreadsheet, 30 of which are tracked in another, and 40 of which are unaccounted for. Obviously for regulatory reasons this presented an issue.
Another problem with using Excel as opposed to a private equity investing software, is that depending on where the Excel document is stored, it is not always accessible to everyone while they are on the road. Often files that are stored on a shared drive are inaccessible from outside of the office. Many clients we work with also choose to store these documents locally on one employee’s computer. This precarious arrangement allows for the possibility that the document could get lost or deleted altogether.
And finally, using Excel to track people and the organizations they are associated with has limitations relative to a fund management CRM system. Excel is what is referred to as a “flat” database structure, meaning that you can list individuals and their contact information but you can’t necessarily look up all the individuals who work for one particular company or view other connections between contacts.
For more information on Application Experts and why you need a fund management software solution like AIM, contact us today at (800) 914-9120. And follow our Fund Management Software Blog to follow our 3 Part series on integrating the right private equity software solutions. Next week we’ll discuss AIM vs. the Consultant.