Category: Fundraising Strategy

The 2024 PEI Investor Relations & Fundraising Forum, held in San Diego September 25-26, 2024, emphasized one clear message for private equity firms: the industry is recalibrating, and it’s time for firms to realign their strategies. 

While fundraising has typically followed a cyclical three-to-four-year pattern—leaving many anticipating renewed activity in 2025—the old playbook is no longer enough to stay ahead. There is optimism that 2025 will see a resurgence in private equity fundraising, but it’s clear that a recognition in how GP’s approach fundraising must evolve to meet new expectations.

Investors today are increasingly pragmatic, seeking investments that not only promise returns but also resonate personally with their financial goals and values. In turn, GPs must tailor their marketing and fundraising efforts to appeal to these diverse client profiles. Firms that leverage technology to support this multifaceted approach and adapt quickly will thrive, meeting evolving investor expectations for transparency, personalized communication, and dynamic engagement. Conversely, those without purpose-built private equity software to support this agile, multi-pronged strategy risk being left behind.

A Market in Flux: Reassessing and Realigning

In what some speakers called a “get your act together” phase, PE firms are re-evaluating their fundraising tactics and revitalizing strategies that may have grown stagnant during the recent market lull. Teams are leaner, with people wearing multiple hats, which has shifted the burden of investor communication to nearly everyone in the organization. As a result, the role of investor relations has expanded, with sales, data collection, and client engagement now requiring a single, more agile process.

This shift has made firms realize that the same old approach won’t work for much longer. Investors are seeking firms with an operational infrastructure capable of reporting on non-traditional metrics. So, in light of the market downturn, there is a heightened focus on actual distributions rather than projections, which encourages firms to be transparent about underperforming vintages from previous years and to candidly share lessons learned. Consequently, there is a growing emphasis on metrics like DPI (Distributions to Paid-In Capital) over IRR (Internal Rate of Return).

Diversifying Investor Bases: The New Communication Challenge

The Forum also highlighted a growing need for fund managers to diversify their investor bases. As private capital markets broaden, fund managers are engaging with an increasingly varied range of investors—from institutional investors to high-net-worth individuals and family offices. Each group brings its own set of expectations, particularly when it comes to communication and engagement.

High-net-worth individuals and younger generations of investors, in particular, are pushing for change. They expect digital platforms, instant access to personalized content, and quick insights, rather than traditional reports or meetings. Delivering on these diverse communication needs demands a more sophisticated strategy. Solutions like Altvia’s LP Portal and VDR, ShareSecure and our CRM, AIM, are essential for helping firms streamline workflows, enabling fund managers to deliver personalized and relevant content to each investor type without sacrificing efficiency. Moreover, ShareSecure’s landing page functionality is designed for rapid deployment, allowing firms to create targeted, appealing pitches for any use case—marrying speed with high-quality communication.

Storytelling: The New Language of Fund Performance

Fund performance has always been important, but what’s changing is how firms communicate that performance. Today, it’s not enough to present a series of numbers; investors want to understand the story behind those numbers. Why did a particular investment perform the way it did? What were the key decisions and events that shaped its outcome? 

This need for transparency is especially important for funds with underperforming vintages, as it offers an opportunity to build trust by sharing both successes and setbacks openly. Firms that are able to communicate both successes and setbacks through compelling storytelling will find that they foster deeper trust with their investors.

Products like Altvia’s Answers empower firms to craft narratives by isolating key data points and presenting them in an engaging way. Whether it’s explaining why a particular investment didn’t meet expectations or highlighting a strong exit, the ability to weave data into a cohesive story is now a crucial part of fundraising and investor relations. This narrative approach resonates more with investors, particularly as they seek to understand the ‘why’ behind the numbers.

The Road Ahead: Embracing Technological Evolution

As firms prepare for a potential private equity fundraising rebound in 2025, adaptability and agility will be the key to success. The needs of today’s investors have evolved, and the technology that firms use must evolve with them. The traditional fundraising playbook is being rewritten, and technology is at the forefront of this transformation. Instead of trying to fit new investor expectations into outdated systems, firms must embrace platforms that offer dynamic, customizable solutions.

Private capital fundraising isn’t what it used to be—and that’s a good thing. If your firm is ready to evolve, it’s time to explore how platforms like Altvia can help you meet the changing demands of your investor base. Here are 5 tips to make 2025 your strongest fundraising year yet: altvia.com/elevate-your-fundraising!

Imagine you’re hosting a dinner party—one of those first-time gatherings with new friends where every detail counts, from the perfectly paired wine to the carefully curated playlist. The goal? To impress, to connect, and ultimately, to build lasting relationships. Now, swap out that dinner party for a fundraising campaign in the alternative investment space. The principles are surprisingly similar: you want to create an unforgettable and differentiated experience for your guests (or in this case, your investors), connect on a personal level, and build a shared vision for an enduring partnership.

Private Equity fundraising is more than just presenting numbers; it’s about crafting an experience that resonates with investors, making them feel valued and excited about what you have to offer. In a world where competition is fierce and attention spans are short, how do you stand out? How do you make your campaign the one that everyone wants an invite to?

At Altvia, we’ve honed the art of fundraising into a science, blending data-driven insights with a touch of creativity to ensure your campaigns are not just successful, but memorable. We’re not here to tell you to just follow trends—we’re here to help you set them. So, whether you’re a seasoned pro or a rising star in the alternative investment space, these five tips will elevate your fundraising game, making your campaign the talk of the town (or at least the boardroom).

Ready to start your next fundraise? Let’s dive into the essentials that will make your campaign the one everyone’s talking about.

1. Harness the Power of Data Analytics

Leveraging analytics is no longer optional for alternative investment firms looking to be the best. Investors increasingly expect fund managers to provide detailed, data-backed insights.

By utilizing advanced analytics tools, you can:

• Understand Investor Preferences: Analyze past interactions and investment behaviors to tailor your pitches.
• Predict Trends: Use data to forecast market movements and adjust your strategies accordingly.
• Demonstrate Performance: Present clear, data-supported evidence of your fund’s performance and potential.

Embracing data analytics not only enhances decision-making but also builds credibility with prospective investors.

2. Embrace Digital Solutions for Communication

Traditional private equity fundraising methods are evolving. Digital platforms offer unprecedented opportunities to efficiently reach a broader audience. Consider the following:

• LP Portals & VDRs: Utilize flexible and brandable platforms that streamline the investment process, making it easier for investors to commit and stay updated, while also giving you visibility throughout the process.
• Social Media Engagement: Share insights, updates, and thought leadership to build your brand presence.
• Virtual Meetings and Webinars: Facilitate connections without geographical constraints.

By leveraging digital solutions into your communication strategy, you can engage with investors more effectively and efficiently.

3. Foster Transparency and Build Trust

Trust is the cornerstone of successful fundraising. Transparency fosters trust, and in the age of information, it’s easier—and expected—to maintain openness. To build trust:

• Detailed Reporting: Use technology to offer comprehensive, easy-to-understand reports that highlight key metrics and developments.
• Regular Updates: Keep investors informed with consistent, transparent updates about fund performance and strategies. 
• Open Communication Channels: Encourage questions and provide clear, thoughtful responses.

Demonstrating transparency not only reassures current investors but also attracts new ones who value candid and straightforward communication.

4. Utilize an Industry-Specific CRM 

Managing relationships is pivotal to fundraising success. It’s table stakes for a firm to use a CRM in today’s landscape, so why waste your time with a generic CRM that’s not tailor-made for your workflow? The benefits of purpose-built solutions for private capital markets include:

• Intelligently Concealed Complexities: Say goodbye to the clutter of endless custom fields that only add confusion. A private equity CRM comes preconfigured with the specific features and workflows you need, streamlining operations and allowing your team to focus on what matters—building relationships and closing deals.
• Curated Reporting: Generate investor-specific reports with ease, pulling in data from multiple sources to create tailored updates that speak directly to your investors’ interests and concerns. This level of customization enhances your communication strategy and demonstrates your commitment to transparency and precision.
• Seamless Integration: A purpose-built CRM effortlessly integrates with your existing tools and data sources, creating a unified platform that boosts productivity across your entire operation. This ensures that all teams—from deal origination to investor relations—are working from the same playbook, driving efficiency and collaboration.

By choosing a CRM specifically designed for the alternative investment industry, you’re not just managing relationships—you’re optimizing them for long-term success.

5. Craft a Compelling Story and Value Proposition

Beyond numbers and data, storytelling is a powerful tool in fundraising. A compelling narrative can differentiate your fund and resonate with investors on a personal level. To craft your story:

• Highlight Unique Value: Clearly articulate what sets your fund apart and the unique opportunities it offers.
• Share Your Vision: Convey the long-term impact and goals of your investment strategy.
• Incorporate Technology: Showcase how technology enhances your operations, from data analytics to investor relations.

A well-crafted story not only captures attention but also fosters an emotional connection with potential investors.

The Dynamic Nature of Fundraising 

Fundraising in the alternative investment space is constantly evolving, with technology playing a pivotal role in shaping successful strategies. By leveraging data analytics, embracing digital platforms, fostering transparency, utilizing a purpose-built CRM, and crafting compelling narratives, you can enhance your fundraising efforts and build lasting relationships with investors.

At Altvia, we’re committed to supporting you on this journey with solutions and insights that empower your success. Explore how we can navigate the future of fundraising together with our fundraising software: https://altvia.com/fundraising-and-marketing/.

Leveraged buyouts (LBOs) are a cornerstone of private equity, where financial engineering meets strategic acquisition. In an LBO transaction, PE firms acquire companies using a substantial amount of debt, aiming to amplify returns by leveraging the acquired company’s assets and cash flows. But, what does that even mean? How do LBOs work? And what are the implications for both the investors and companies involved?

What is a Leveraged Buyout (LBO)?

A leveraged buyout is a financial transaction in which a PE firm acquires a company primarily using borrowed funds, with the expectation that the target company’s cash flows will be sufficient to service the debt. The PE firm typically contributes a portion of equity capital, often alongside limited partner investors, while the remaining purchase price is funded through various debt instruments.

What does an LBO process look like for PE Firms?

Before making an acquisition, PE firms conduct their due diligence through a series of steps, including analyzing a potential company’s assets, cash flows, and cash expenditures. If the deal seems to have potential, the PE firm negotiates a price and outlines a deal structure. Next, they source capital to take ownership of the business, and then implement strategic changes and cost-cutting measures to accelerate growth (and revenue).

To determine if a deal is worth pursuing, firms use an LBO model for evaluation, which, as the Corporate Finance Institute explains, can get pretty complicated due to the unique factors that go into such a deal. These include, but are not limited to:

• A high degree of leverage
• Multiple tranches of debt financing
• Complex bank covenants
• Issuing of preferred shares
• Management equity compensation
• Operational improvements targeted in the business

Once evaluating these factors, firms need to measure key metrics to ensure the deal is favorable, such as:

• Debt/EBITDA
• Interest Coverage Ratio (EBIT/Interest)
• Debt Service Coverage Ratio (EBITDA – Capex) /  (Interest + Principle)
• Fixed Charge Coverage Ratio (EBITDA – Capex – Taxes) / (Interest + Principle)

When analyzing these metrics, firms should also conduct what’s called a sensitivity analysis. This analysis forecasts LBO outcomes based on different assumptions and scenarios, such as changing the EV/EBITDA acquisition multiple, the EV/EBITDA exit multiple, and the amount of leverage (ie: debt) used.

If using a templated LBO model, it’s essential to keep in mind that certain models use specific assumptions. In Firmex’s templated LBO model, for example, it assumes 100% acquisition of the target company, that the most recent year-end balance sheet is the closing balance sheet, that there are no step-ups in asset values, and that there will be no amortization of goodwill from an acquisition. If these assumptions don’t apply to your deal, factor that in during your analysis. 

How to structure an LBO:

At the heart of an LBO lies the intricate structuring of financing. PE firms work closely with investment banks and lenders to craft a capital structure that optimizes returns while managing risk. This structure typically involves a mix of senior secured debt, subordinated debt, and equity financing.

• Senior Secured Debt: This forms the backbone of the LBO financing and is usually collateralized by the assets of the acquired company. Senior debt holders have priority in repayment in the event of bankruptcy or liquidation, providing a level of security for lenders.
• Subordinated Debt: Also known as mezzanine financing, this type of debt sits between senior debt and equity in the capital structure. It often carries higher interest rates and may include equity kickers such as warrants or convertible securities, providing lenders with additional upside potential.
• Equity Financing: PE firms contribute equity capital to the transaction, typically ranging from 20% to 40% of the total purchase price. This equity investment serves as a cushion against potential losses and aligns the interests of the PE firm with those of its investors.

How do PE firms ensure success with LBOs?

Positive Cash Flow:
Central to the success of an LBO is the target company’s ability to generate sufficient cash flows to service the debt. PE firms conduct extensive due diligence to assess the target company’s financial health, market position, growth prospects, and operational efficiency. By identifying opportunities to improve efficiency, increase revenue, or reduce costs, PE firms aim to enhance the target company’s cash flow generation potential.

Value Creation:
Another key point to understand is that PE firms execute LBOs with the ultimate goal of creating value for their investors. This means that the fund managers are hyper-focused on value creation in their portfolio companies. This value creation can take various forms, including operational improvements, strategic initiatives, and financial engineering. Over the investment horizon, the fund managers work closely with the portfolio company’s management teams to implement value-enhancing strategies and position the company for a successful exit.

Exit Strategies:
Exit strategies for LBO investments vary but typically include selling the company to a strategic buyer, conducting an initial public offering (IPO), or recapitalizing the company to distribute cash to investors. The timing and method of exit depend on market conditions, industry dynamics, and the specific objectives of the PE firm and its investors.

In conclusion, leveraged buyouts represent a powerful tool for PE firms to unlock value and drive growth in target companies. By leveraging debt to finance acquisitions, PE firms amplify returns while carefully managing risk. However, successful LBOs require rigorous due diligence, disciplined execution, and strategic value-creation initiatives. As a cornerstone of the PE industry, LBOs continue to shape the landscape of corporate finance and investment, driving innovation, efficiency, and shareholder value.

Unlock value, drive growth, and amplify returns with Altvia. Discover how our comprehensive suite of solutions streamlines your due diligence, execution, and strategic value-creation initiatives for successful leveraged buyouts. To learn more about Altvia’s solutions, start a conversation with our team.

Key Takeaways from the ACG Mid-South Capital Connection Event in Nashville, Tennessee, 2024. 

This year’s ACG Mid-South Capital Connection Event in Nashville brought together a vibrant mix of alternative asset professionals, from private equity investors to mezzanine lenders and investment bankers, all converging to discuss the pulse of the middle market.

A significant portion of the discussions revolved around market trends and valuations for middle market companies. Topics ranged from the challenges of establishing pricing baselines and employment metrics, to the debate over whether recent valuations signify a new normal or an anomaly. And notably, there’s been a surge in seller rollover equity and subordinated debt, underscoring the evolving dynamics of deal structuring. 

Here were our biggest takeaways for dealmakers:

Are recent valuations the new normal?

Valuation multiples, pivotal in determining purchase prices and subsequent investment returns, are under the spotlight. The consensus was that capital is experiencing a surge in cost. With interest rates climbing, private equity firms are grappling with heightened borrowing expenses to fuel their acquisitions. This spike in capital costs not only diminishes the allure of potential deals but also directly impacts a firm’s capacity to generate preferred returns. 

And despite the inherent unpredictability of market dynamics, the show must go on, so attendees explored strategies to navigate the challenges of deal origination and dealmaking. Among the strategies discussed were adopting value-oriented investment approaches, conducting comprehensive industry analysis, implementing operational enhancements, and employing effective timing and exit strategies. 

Creating a repeatable cash flow model.

In addition to navigating market uncertainties and strategic considerations, having a repeatable cash flow model was discussed as being paramount for private equity investors. A robust cash flow model provides invaluable insights into a target company’s financial health, helping investors gauge its ability to generate consistent returns over time. By meticulously analyzing cash flows, investors can identify potential risks, assess the sustainability of earnings, and make more informed investment decisions. Moreover, a well-constructed cash flow model serves as a crucial tool for scenario analysis, allowing investors to stress-test their assumptions and evaluate the impact of various market conditions on investment performance. Ultimately, a repeatable cash flow model not only enhances investment decision-making but also contributes to the long-term success and profitability of private equity investments.

How are private equity investors creating a repeatable cash flow model? Data and technology. Firms that have a data-driven approach to understanding their business and investment performance are able to analyze historical data, market trends, and other relevant factors to forecast future cash flows with greater accuracy and efficiency. 

AI’s role in dealmaking.

Again, is it even a 2024 event without the topic of AI being top of mind? Amidst the enthusiasm surrounding AI, concerns about its ability to be in compliance with evolving regulations arose. Industry experts emphasized that AI should be viewed as a tool to enhance productivity and efficiency, rather than a threat to human involvement or fact-checking. Just as a summer intern transforms the way we interact with admin tasks, AI represents a natural progression towards greater automation and synthesis of data within private equity platforms and tech stacks.

There’s a clear need for data quality, data visualization, and data analytics in private equity, so the integration of AI into private equity deal flow processes represents a paradigm shift in the way firms approach data analysis and decision-making. By leveraging AI strategically and adopting a progressive mindset, businesses can unlock new opportunities, streamline operations, and gain a competitive edge in an increasingly data-driven world. As we navigate this AI revolution, one thing remains clear: the future belongs to those who embrace innovation and adaptability.

Want to hear more about the ACG conference or how technology can support your firm’s evolving needs? Let’s connect!

For more ACG information, check out our ACG St. Louis DealSource Event recap.

Market volatility, inflation pressure, rising interest rates–we could argue that the investment landscape is even more challenging than it was a year ago. As a result, PEs report year-over-year declines across everything from deal activity to fundraising to exits. 

To maintain a competitive edge, firms are finding new strategies and sectors to innovate in, and they’re sitting on a record-level amount of funds to fuel it–$290 billion, to be exact. This record level of dry powder is putting pressure on VCs to step up their investment pace, and startup founders are being told to brace for a tidal wave of venture capital interest throughout 2023.

If the past year has shown us any indication of what’s to come, VC firms that put that dry powder to use could lead to another blockbuster investing year, as we saw in 2021. So, how can PEs best leverage that interest amidst continued economic downturns? It starts by understanding a few key takeaways from the first half of 2022 to fuel new innovation cycles and strategies. Keep reading as we outline our findings and suggestions for a way forward. 

Findings from the First Half of 2022

1. PE Activity Stays Above Pre-Pandemic Averages

In comparing the first half of 2022 with that of 2021, PE firms announced deals have  declined by 18%. Key factors attributing to the decline include those typical in an increasingly volatile market: a widening expectations gap between sellers and consumers; reduced visibility into the overall outlook of the business; a looming recession.

But it’s not all bad news. 2021 was a record year for PE firms, representing more than $1.2t in deal activity. Whatsmore, the current deal rate still exceeds pre-pandemic averages, which could very well turn into another record-breaking year for the industry by the close of Q4.

2. Fundraising Remains Robust 

Just as deal activity declined in the first half of 2022, so did fundraising. As of June 2022, firms had raised over $250 billion, which is about 15% short of the same period last year. However, in contrast to last year, which saw a spike in new growth strategies and activity from smaller managers, 2022 has been dominated by large buyout funds.

Given the decline in public markets, it’s possible that fundraising will continue to drop throughout the remainder of the year. Thankfully, LPs have flexibility in managing those imbalances, and PE firms are unlikely to feel any capital constraints in the foreseeable future.

3. A Mitigated Pressure for Exits

Perhaps one of the most significant changes year-over-over is the number of exits, which fell roughly 35% in the first half of 2022. This decline was driven almost entirely by industry-specific limits to achieve those public exits.

As an example, sales to SPACs represented nearly one in five exits in 2021. However, strong headwinds in that market have made it almost impossible for PEs to sell to SPAC vehicles. As a result, exits in that sector have declined by 94%. Nonetheless, the pressure for exits has been mitigated thanks to the strong market of the past 18 months. 

Spark New Innovation Cycles to Stay Ahead

The past decade has been heavily focused on growth-oriented investments. But, with today’s uncertain landscape, including factors like rising interest rates, shifting gears is essential for success. As the role of operational value-add quickly emerges in the spotlight, firms should push to shift from “growth-at-all-costs” to “value over volume” strategies as a way to leverage dry powder and stay ahead of the competition. 

Where a firm can uniquely add value varies by sector and portfolio. To hone in on areas to spark innovative solutions that create lasting value, PEs must ground themselves and go back to their roots. This means taking a “roll up your sleeves” approach to dig deep into areas like supply chain management, pricing optimization, digital transformation, and working capital–the key areas that will be the new primary drivers for returns.

Altvia’s PE-specific solutions can help develop, streamline, and optimize your firm’s value creation strategies, from streamlining business intelligence data to providing actionable reporting and insights throughout your funnel. To see it in action, request a demo with a member of our team. 

According to Bain & Co., the number of deals executed in 2020 was down by approximately 1,000 as compared to numbers from prior years. In 2021, the number of deals was still down, but the total investment value increased due to transactions having larger values. The first six months of 2022 closely resembled the record-breaking performance of 2021, but pipelines started slowing after the Federal Reserve rate hike in June 2022. Raising concerns of persistent inflation and a minor recession, this pause has continued into 2023 and will likely persist until macro factors stabilize.

What’s the takeaway for PE firms? Now is the time to implement operational efficiencies to find and close deals faster and smarter.

How do you do that? We explain below. 

Proven Tactics for Improving Your Firm’s Performance

The last thing you want during challenging economic times is to find your firm grasping at straws as team members scramble to determine the actions or processes that will help you land much-needed large deals. You need to have a plan with proven tactics that you’re already executing before things go south.

Successful firms will tell you that these four best practices are essential:

1. Hire and properly equip business development professionals. There’s plenty of data out there showing that growth investors with well-staffed deal sourcing teams almost always find themselves in the top quartile across stage, sector, etc. Of course, the people you add to your team must be smart, savvy, and eager to succeed. But they also need the right tools, including a PE-specific CRM like Altvia they can use to prioritize outreach activities, log proprietary information, set task reminders, etc.
2. Leverage the latest data analytics technology. PE-focused solutions can turn data into easily digested visuals your team can use to target companies that fit your thesis. Spotting companies that are outperforming expectations before your competitors do is a great way to get ahead. You’ve got to have tools that enable you to “hear” the buzz a company is generating before others do. That gives you a head start in determining if they represent a valuable opportunity.
3. Stay top-of-mind with business development reps. This doesn’t have to mean costly day-long, in-person meetings. Simply sending a weekly or monthly newsletter, calling to touch base, or connecting for a quick conversation at events you’re already planning to attend can be all that’s needed to remain on someone’s radar.
4. Segment deals into tiers. Segmentation helps ensure that your team members spend the majority of their time on the most valuable deal opportunities. You’ll still want them to put some effort into deals at every level, but they’ve got to prioritize deals with higher upsides.

An added benefit of taking these steps is that it helps build your firm’s brand. And when people start recognizing your name, you’ll find that this recognition opens doors to opportunities that were previously closed. You’ve still got to close the deal, but getting your foot in the door is the first step.

Focusing on Deal Quality vs. Quantity

Many firms find that landing a big deal is more emotionally rewarding than landing 10 smaller deals that add up to the same total deal value. That’s not surprising. You get to know the people involved, and the resulting camaraderie adds to the sense of accomplishment.

And, as noted above, developing the ability to close more significant deals can be a lifesaver when something adversely affects the PE environment and the pool of smaller opportunities quickly dries up.If you’re not yet using purpose-built solutions like our AIM CRM, you owe it to your firm to check them out. Contact us today to request an informative demo.

Source: Bain & Co. Global Private Equity Report 2023

Raising your first fund can be one of the biggest challenges you face as a firm. From building a backing of strong connections to empowering LPs with data-driven insights, no detail can be overlooked. 

But, thanks to a recent guide released by TechCrunch, there are 15 steps the best firms follow when raising funds. We’ve summarized them here to help you tackle the challenge and lay the groundwork for a high-performing fundraise.

1. Build Your Backing

   The more backed you are, the more investable you are. Before you begin soliciting your fund to LPs, network, network, and then network some more. The more people on your side, the more feedback you gather, and the more awareness you gain. This helps ensure your fund will have an interested audience, along with a network that can help make valuable connections before you launch.

2. Set Up a Data-Driven Deck…

   Compile all of the information to support your pitch (a tool like Altvia can help by centralizing all alternative and traditional data across your industry and firm), and put together a strong marketing toolkit, complete with a data-backed pitch deck, website, and social media presence to prove your credibility.

3. … a Data-Driven Digital Presence …

   Make sure your entire team has a professional digital presence, including an up-to-date LinkedIn profile, and leverage their following and shareability to spread awareness of the metrics you want to share (ie: the size of exit, number of people you managed, budget, etc.).

4. … and a Data-Driven Due Diligence Process

   Set up a data-informed due diligence questionnaire for easy LP access, including details on return history, legal documents, a fund organization chart, portfolio construction model and one-pagers, and the resumes and case studies of key personnel and past investments.

5. Provide Answers to FAQs
   
   No matter how unique your fund is, chances are you’ll have some commonly asked questions from LPs.

   Prepare answers in advance, and compile your FAQs into a single document so you can arm LPs with responses to the questions they care about most from the start.

6. Self-Evaluate

   If your fund doesn’t stack up to the track record of successful first-time fundraises  (industry-standard strategies that have landed investors before, experienced founders, target AUM of >$50 million), you may want to reconsider your strategy.

   Be honest with yourself…can you really raise money from investors, or should you be focusing on family offices and/or high net worth individuals?

7. Recruit Resources

   If your budget permits, recruiting additional resources can help accelerate and better operationalize your fundraise. Whether you leverage a part-time hire or AI/tech, additional help can empower you to then refocus time and effort on other areas of the business, while ensuring every aspect of your fundraising efforts have the time and attention to detail needed to succeed.

8. Aggressively Maintain Your CRM

   The key to any successful private equity fundraise is organization and transparency within the firm. Arming every team member with access to your CRM, including transparency of interactions with potential investors in every stage of the pipeline, is critical to building and maintaining relationships.

9. Tap into Your Network…

   Remember how important we said it is to network in Step #1? Now that you’re at a more active stage of your fundraise and have your data-driven resources together, it’s time to tap into the network you’ve built to solidify your backing.

   While you’ll likely receive a lot of “nos,” this is your chance to ask for feedback and referrals to grow your audience and reach new potential investors.

10. … Including Your Digital Network

    In-person meetings are great, but organizing 50+ of them can be time-consuming, and ineffective use of your time. Incorporate a few virtual events in your networking strategy to help you exceed your reach and gain exposure to new people and opportunities you may not have had access to otherwise.

11. Secure Speaking Slots

    Build up a database of investor-focused events, and contact organizers to secure speaking slots. Even if you’re just introducing a sponsor or keynote, you’ll be growing your presence among a captive audience, who could also be future investors.

12. Control the Meeting Format

    Once a meeting with an LP is secured, make sure the time is productive for both parties. Begin by asking the LP if they’d like to go through the deck page-by-page, or if they’d prefer to jump in with initial questions.

    While discussing, pause regularly for questions and make sure the format is conversational; no one should speak for more than two minutes at a time without checking in for feedback or dialogue from the other party.

13. Do Your Own Due Diligence

    While the LP will be running their own checks, you should also know as much about the prospective LP as possible to help your firm tailor the pitch, and know what to expect before entering a partnership.

14. Keep Your Legal Counsel on Standby
    
    A lot of paperwork goes back and forth during onboarding, so make sure to have your legal counsel ready to review every document that comes your way before officially entering an agreement with an LP.
15. Keep Up with Quarterly Reporting

    Finally, after your first close, quarterly reporting is mandatory. Within 45 days of the close of each quarter, provide detailed reports on key metrics for LPs to keep them in the loop (just be sure they are compliant with your Limited Partnership agreement). 

From centralizing your data for decks and reports to integrating a powerful CRM to fuel conversations during every stage of your deal funnel, Altvia’s PE/VC-designed software can help ensure a smooth and seamless fundraise.

To learn how we can help your firm throughout every step of your first fundraise, start a conversation with our team.

Operational efficiency is an increasingly hot topic for fund managers looking to gain a competitive edge in ever-more-competitive markets. The key to achieving greater efficiency? Cutting-edge fund manager software.

From more effective fund management, to deal flow visibility, to the increased transparency that stakeholders are demanding, the right fund management software can help a firm streamline its operations while also providing a more positive stakeholder experience.  

Today’s Advanced Fund Manager Software

In the early days of a fund management platform, there were many adoption hurdles to overcome. This included explaining to decision-makers what this new thing called “the cloud” was, why using it was better than storing data on local servers, and why it was much better than having team members maintain data on the hard drives of their individual computers!

The times definitely have changed. There are many people in the industry today who are only vaguely aware of what a “server” is if they’re aware at all. Every virtual task they attend to—in both their personal and professional lives—is accomplished in the cloud.

No longer does Altvia have to pitch the advantages of the cloud in areas like sophisticated authentication functionality, data redundancy, etc. We also don’t have to explain why using centrally located, easily accessible fund management solutions are much more efficient.

What to Store in the Cloud for Fund Management Efficiency

Local hard drives and on-premises servers do still exist, of course. Consequently, one area that we do still have to discuss with certain clients is what information they can and should store in the cloud. The short answer is: “Essentially everything.” It’s hard to envision a reason that any type of data shouldn’t be maintained in cloud applications—especially if those applications, like our solutions at Altvia, have enterprise-grade security.

We work to educate prospective clients on the importance of having institutional knowledge in a centralized, online system so that the information doesn’t “walk out the door” when someone leaves the firm or when a laptop fails. But even more than that, we explain that factors like transparency and operational efficiency are far-and-away greater in cloud-based software. Frankly, it’s impossible to be truly transparent with LPs if all your data isn’t in one place.

As for operational efficiency, the ability to produce reports and analyze data in near real-time is vital to a firm’s success. Whether it’s providing deal flow statistics or performance metrics, or responding to an urgent request from an LP, purpose-built fund manager software can help team members handle those tasks quickly and efficiently.

All of our solutions at Altvia have been developed from the ground up with the efficient access of accurate data in mind. That’s because firms that don’t operate efficiently quickly fall behind those that do.

Leverage Fund Management Software to Put Your Data to Work for You

Every firm has data that is vital to its operations. The difference between successful firms and those that don’t achieve their objectives lies in how well they manage that data. Organizations that store information in a disorganized collection of spreadsheets, email inboxes, and disconnected databases are at a distinct disadvantage today.

On the other hand, firms that implement advanced fund manager software have critical data at their fingertips wherever they are and whenever they need that information. And both their team members and the stakeholders they interact with can see the difference in their operational efficiency as soon as their solutions come online.