Category: Fundraising Strategy

10 Reasons Excel Falls Short for Fund Managers

The foundation of fund management is accessible, accurate information. To effectively implement an investment strategy and manage portfolio trading activities, fund managers need to be able to act quickly and seamlessly in collaboration with others on their team.

Many firms are still stuck in the Excel spreadsheet days. Unfortunately, in today’s fast-moving markets and with growing assets under management, Excel just doesn’t cut it. As firms quickly outgrow their use of Excel, they are moving to what we consider the foundation of the work that Private Equity and VC firms do, a sophisticated CRM.

Customer Relationship Management (CRM) systems are the base of a modern technology stack. And since the technology that firms use are only as good as their data, it’s critical to have a robust CRM is a single source of truth that supports:

  • Key workflows
  • Contact management
  • Relationship mapping
  • Deal, fundraising, and pipeline tracking
  • Automation of key activities (e.g., emails and task assignments)

We understand that adopting new technologies and the processes to support those technologies can be difficult. But we have seen first-hand how proper technology in the form of a CRM, like Altvia, can superpower fund management. We’ve also witnessed how old-school tools like Excel fall short. While Excel spreadsheets are good calculators, they don’t satisfy the needs of today’s fund managers.

Here are ten areas where Excel falls short for fund managers.

1. Collaboration

Excel files tend to be built for specific purposes, such as an investor list for newsletter emails, or a targeted fund list. Disruptions to collaboration take place with this approach. Often, the information is pushed out of the “master” list but never comes back with corrections or updates. As a result, multiple copies of the same list are maintained throughout the firm. It’s also difficult to establish a consistent list since multiple people can’t work on the same file simultaneously.

2. Data integrity

When there are multiple people working on the same file, that file often becomes corrupt. We’ve all been there, when the Excel spreadsheet gets returned from a colleague and the formulas are broken. Or, because of the back and forth sharing of the file across different software versions, the file becomes fully corrupt and therefore unusable. This situation requires someone to revert back to an older version of the file and lose all of the recent updates. It’s an incredibly frustrating, time-consuming, and inefficient reality of Excel spreadsheets.

3. Storage

Unless your firm has solid processes in place that everyone adheres to, the issue of file location can become a big problem. As different members of the teamwork on and update an Excel file, it might get saved on someone’s machine, and not where it should be stored for everyone to access. This issue creates confusion and wasted time when people have to hunt down the latest version because it’s not stored in a central location.

4. Control

Excel files can get really big and complex. With so many connected cells and formulas, over time, it becomes difficult to diagnose the cause of an error. Fund managers can spend hours just hunting down the wrong character in a formula that’s causing problems.

5. Connectivity

With information stored across different sheets and files, it’s difficult to see a holistic view and connections in the data across all of the sources. This issue creates gaps in insights and slows down a fund manager’s ability to make effective decisions.

6. Stability

Many fund managers who use Excel store connected information across multiple, interconnected sheets. Over time, this becomes precarious. Each sheet gets more complex, the connections become brittle, and the stability of the data and information is less reliable.

7. Access

Unfortunately, Excel imposes constraints on different users depending on their license, operating system, etc. This makes file access difficult at times and due to constraints in a file, these access issues can block users from getting to the information they need to do their jobs.

8. Reporting

An important part of your job is reporting. When using Excel to manage data, it can take a full day or more to put together a report that answers all the required questions of the firm. Additionally, without structured and normalized data, advanced reporting is nearly impossible.

9. User Experience

Many fund managers have lots of experience with Excel. They were likely trained on the technology at some point in their education or careers. Yet, the user experience can still trip up the savviest Excel user. With the speed that fund managers need to move at, there’s no time to fight with a pivot table, or Google errors happening within a macro.

10. Human Capital

Managing work in Excel is a big waste of human capital. In the time spent trying to bend and shape Excel to get it to work for their jobs, fund managers could be out hunting, building relationships, and staying on top of industry trends.

The switch from Excel to a purpose-built technology for fund management is a huge boon, not only for the individual but also for a firm. As an example, Crestone Capital saved hundreds of hours of work by moving away from Excel and onto Altvia.

With increasing assets under management, Crestone sought out a system to support business growth, create operational efficiencies, and better serve its stakeholders.

The team was using a set of disparate systems including Excel sheets, PDFs, and Microsoft Dynamics. It was cumbersome to gather all client data into a central location, and the group had difficulty leveraging Microsoft Dynamics across the organization to accomplish basic tasks.

In their move to Altvia, using the CRM and Investor Correspondence, Crestone was able to streamline operations, free up team time, and improve investor relationships. Read more about the experience here.

Altvia helps private equity firms move past Excel and operate more efficiently, securely, and effectively. If you want to learn more about how Altvia can support your firm, request a demo.

Private Equity Operational Efficiency: 3 Steps to Differentiate

With increasing pressure from investors about fees and fierce competition across the industry, private equity CFOs are looking for new ways to streamline and stand out. Operational efficiency is a top priority for many private equity firms and executives. 

It is no surprise that firms are investing in private equity technology to address these key challenges and many more:

  • Making data management more efficient
  • Improving reporting capabilities
  • Integrating systems for a stronger investor communication platform

Whatever firms are looking for, transformation through purpose-built private equity technology is now the name of the game. 

Key advantages that come from investing in new solutions include:

  • Optimizing workflows
  • Reducing operational expenses
  • Freeing personnel resources to focus on more strategic endeavors that support revenue growth

And those advantages together help firms achieve their ultimate goal: standing out from the competition.

In this blog post, we cover how private equity firms can improve operational efficiency and their ability to create an unmatched stakeholder experience to differentiate themselves in the marketplace.

Step 1: Use Private Equity Technology to Make Data Self-Serve

What if every stakeholder could access the real-time information that’s relevant to their specific goals—and get that data whenever they wanted it? 

That’s crucial since every stakeholder has different interests and needs. So, sending out, or providing access to, the information you think they’ll want is a strategy that’s bound to fail in many instances. One-size-fits-all is not an approach that works in private equity.

Intuitive solutions like Altvia give customers, investors, or constituents easy, self-serve data access and important functionality right on their desktop. After taking just a few minutes to learn how to use the intuitive tools in the software, the entire team is able to work more efficiently, spend less time waiting for information, and more time acting on its insights.

We all know that timing is everything in this industry. Miss connecting with someone—by days, hours, or even minutes, in some cases—while your competition is doing exactly that and you may miss out on starting or strengthening a long, lucrative relationship.

Step 2: Ensure Quality Control with Private Equity Technology

In addition to offering a simpler way to manage information, today’s private equity technology solutions can drastically improve your firm’s data quality control, flagging miscalculated or outdated data automatically. Providing stakeholders with inaccurate or old information is a sure way to make them question your attention to detail and also your capabilities in general.

With more accurate information from the get-go, your firm is poised to put together more profitable deals. Another plus? You can consolidate data from multiple sources into one central private equity technology system and optimize workflows to scale for growth.

Step 3: Leverage Technology for Private Equity Efficiency

Whether you’re working on the initial round of funding or are just days away from closing the deal, the reporting tools in today’s private equity technology can ensure everyone on the team is on the same page. What’s more, these tools can improve the efficiency and effectiveness of reporting to investors.

You can also take advantage of convenient communication tools for connecting more efficiently with busy investors. Stakeholders appreciate getting timely, concise, and helpful information.

Private Equity Technology Is the Key to Steady and Significant Improvement

Of course, throwing private equity technology at a problem is not going to change your business overnight. It’ll take some time and effort to implement a new system the right way. But in the end, your team will be able to work on more fulfilling—and profitable—tasks that set your firm apart.

Four Areas to Consider During the Fundraising Process

Private equity success is highly dependent on your ability to successfully fundraise. In the past, much of the fundraising process and related communication were managed manually. 

In recent years, the explosive growth in the private equity space has increased the volume of people, information, and activities there is to manage. 

You used to be able to fundraise successfully simply by leveraging past relationships. Today, LPs are demanding more access to information, proactive communications and reporting, and seamless exchanges with their GPs.

Software makes the Fundraising Process Efficient

With these increased expectations, it’s worth taking a closer look at the steps in the fundraising process. Are you providing an excellent experience for your investors? Or are you, instead, providing the bare minimum in terms of data access and service? 

Evaluating how investors perceive their interactions with you enables you to identify opportunities to improve communications. It also allows you to leverage technology to be more proactive and provide greater information access to LPs.

Below are four areas to consider throughout the fundraising stage. 

You should use them to identify opportunities to increase your efficiency and improve the investor experience. 

Every advance you make puts you a little farther ahead of firms that aren’t proactive and stick with the status quo. 

1. General communications

How do you communicate with your investors? Are you doing so in the right ways and at the right times? There are a variety of messages you might share with your investors—information on what you’re bringing to market, potential close dates, the fund prospectus, and others.

Consider the channels you’re using to deliver these messages and make sure that they are accessible and convenient for your investors to receive. You might be sending this information via email, but consider the work the investor must do to keep track and aggregate the messages your firm sends. Find ways to simplify the delivery, improve the organization of the information, and personalize the message.

For example, if all the emails of a particular type that you send to investors start with the same word or phrase (e.g., Fund Prospectus: [fill in the blank]), that makes it easier for the recipient to search for an email (Find: “Fund Prospectus”) that they may have archived.

Communications also can be improved using technology to provide targeted email messages, delivered based on the activity and behavior of your investors. Email tools can help your firm ensure accuracy and save time when emailing lists of recipients, too. 

Often, email tools can connect to your CRM, allowing your team to create reports and lists, and to send updates to groups quickly and efficiently. In the Altvia platform, users can “BCC” emails and track results for compliance as well as verify which recipients receive emails.

2. Document sharing

How are you sharing documents? In the fundraising process, many due diligence questionnaires, reports, and agreements are shared back and forth between LPs and GPs. If you’re not handling this process the right way, it can be both time consuming for your team and irritating to investors.  

These documents are often shared and requests are sent via email. With a decentralized system like email, files get lost and it’s not clear where ownership lies. This can create the impression that your firm is disorganized or cause delays in the fundraising process.

A portal where DDQs and agreements are posted, requests are transmitted and assigned, and progress can be followed solves many of the problems that arise as a result of decentralized file sharing. Central file-sharing systems offer an organized structure that creates clarity for investors and demonstrates your professionalism.

3. Status management

GPs need an easy way to identify who owns a particular investor request, what the components of the request are, and when it’s due. 

Often LPs ask the same questions or request similar information. By formalizing responses to requests, GPs can create templates or a collection of commonly asked questions and answers to pull information from. This is far more efficient than drafting new verbiage each time a request is received. 

As a result, you can provide a faster response. In addition, because the core text has been reviewed and approved, you can be confident that you’re providing accurate and consistent information across LP communications. 

4. Firm differentiation

Investors are typically working with a variety of GPs. What is your firm doing to create a better experience for investors in order to build trust and differentiate? 

If the answer is “Very little,” that’s a problem. Investors understandably gravitate to the firms that stand out from a service perspective.

Top firms are identifying points in the fundraising process (and beyond) to build brand equity and personalize communications. This can be done through activities like investor nurture campaigns. 

Messages that might be included in this type of campaign include:

  • Information about the firm and your niche
  • What you’re seeing in the market and learning from those findings
  • Your firm’s investment focus
  • Portfolio company performance
  • Announcements of upcoming webinars and events
  • Suggested resources and publishers for investors to follow

Firms can also include personalized content in nurture programs based on investor behavior.

When it comes to the need for advanced software, fundraising should be at the top of your list. 

Assessing and improving your investor’s experience during the fundraising process is an important step to building more credibility and strengthening your relationships with investors. 

And, of course, doing that helps ensure continued investment and future funding.

If you’re looking for more guidance on fundraising software and ways to improve the investor experience, read our full guide by clicking below.

How Can I Target Investors with Private Equity Fundraising Software?

When it comes to private equity fundraising software, potential clients often start the conversation by inquiring, “How can I better target investors for my private equity fundraising?” That’s a common question but one that doesn’t have an easy answer. 

It’s no surprise that GP-LP communications have quickly risen to the top of the priority list as far as fundraising goes. That shift in priorities has occurred primarily because these days, when fund managers have to reach a broader audience while prospecting, efficient and effective communication is a must. And improved targeting is the key. 

But to appreciate today’s advanced targeting techniques, you have to understand private equity’s history in this area.

How Firms Operated Before Private Equity Fundraising Software

In the past, fund managers relied on highly manual processes to get their work done. Often, they used Excel spreadsheets or similar tools in conjunction with an email program of some kind to do a passable job of capturing contact information, tracking prospects’ activity, and communicating with them during fundraising. 

Notice the use of “in conjunction with” rather than “integrated with.” That lack of connectivity was one of many significant failings of this approach. 

This method wasn’t ideal, and it definitely wasn’t scalable. It allowed fund managers to get by at the time, but with today’s increased “need for speed” in an increasingly competitive industry, they are realizing that there has to be a better way. 

There is, of course. Technology has improved dramatically over what was available just 5-10 years ago. Tools like our advanced CRM patform for private equity, are helping progressive firms operate more efficiently and scale their operations effortlessly.

Tools To Target Investors

As for prospect targeting specifically, Altvia Correspond Market Edition solves this major fundraising challenge. Market Edition is an email communication tool that is fully integrated with our platform.

Using the solution, fund managers can leverage their entire network and easily identify which prospects to target for their next fundraising cycle. No patchwork outreach. No “swivel chair automation.” Everything they need is in one system that serves as what we call a single source of truth.

For instance, let’s say your firm wants to announce their latest fundraise. Market Edition allows you to easily create contact “smart lists” directly from your records based on virtually any criteria of your choosing, including contact type or role, and contact location. 

You can also use filters to do things like find fundraising prospects that passed on the previous fund but requested that you follow up with them during the next fundraise.

In short, you can easily identify the right prospects for your fundraising and quickly send an email blast that arrives to each recipient fully personalized. 

It’s a great way to start this type of engagement, or any interaction, including things like planning a roadshow.

Targeting and Timing Are Everything

At the end of the day, fundraising is about connecting with the right people at the right time. Private equity fundraising software empowers you to do exactly that. 
Plus, being highly targeted in your outreach means that you don’t bother people who wouldn’t be interested in a particular offering. That leaves them much more receptive to communications about funds that do interest them.

Increasing Transparency for Private Equity Fund Administration

According to a recent study by SEI News, after several years of underwhelming performance and lack of liquidity, many private equity fund administration teams are trying to increase transparency to attract and retain skeptical investors. 

After all, confidence is—as it should be—a critical element when it comes to making a commitment. 

A great way to provide the transparency that stakeholders crave, both in fundraising and investing, is to implement a purpose-built and intuitive fund management software platform. 

Not only does this type of system simplify private equity fund administration for the primary users, it makes it fast and efficient to provide information and insight to anyone outside the firm who needs it. 

What Is “Transparency” in Private Equity?

From a fundraising perspective, transparency starts by knowing where you are in the process. You have to have an accurate understanding of your progress in order to communicate information clearly and concisely to investors. 

For example, if you have a first close and are planning on a second close at a specific future date, having clarity on where you are in your overall fundraising process at any given time enables a GP or manager to be transparent regarding their fundraising activities.  

The right private equity fund administration system can also provide important information should any issues arise with the fundraise. Specifically, a system that helps track detailed data on your contacts could prove invaluable in a case involving alleged malfeasance by consultants or other intermediaries. 

Documenting the connections between your fundraising prospects and your fundraising activities can be critical to understanding and explaining your level of involvement. Without that type of easily accessed “audit trail,” you could find yourself having to do much more work to outline what has happened. 

A private equity fund administration system can be useful on the investing side, as well. In particular, the fact that it provides a central database of all the contacts at each of your investors is very helpful. 

Ensuring that everyone is using the same contract records and has easy access to them is critical.  

Tools To Assist With Transparency and Private Equity Fund Administration

Another critical facet of transparency is understanding who is expecting to hear from you and how often they want to receive communications from you. 

There is such a thing as providing too much information to busy stakeholders, who may feel compelled to look at everything you send so as not to miss something particularly important. 

Consequently, it is important to have a way to track interaction preferences. 

Our data management platform has features that enable users to record these types of characteristics.

Pair it with a means of streamlining and tracking communications with investors, such as our ShareSecure LP Portal, and you have the capabilities you need to quickly and easily share information with all relevant parties—and only relevant parties.

If you’re putting together monthly or quarterly updates, a virtual data room and GP-LP engagement platform like ShareSecure empowers your team to share those documents in a secure fashion. And as you do, you also have visibility into how often your investors are accessing the information.

Private Equity Fund Administration Requires Effective Data Management

Full transparency in private equity fund administration requires tracking the data you want to share, and that requires having a defined process in place for collecting information—financial or otherwise—on the performance of portfolio companies. If you don’t have that data, you can’t produce the content that you would turn around and share with your LPs.

And, of course, if that information isn’t well organized and accessible, you may as well not have it at all. A private equity fund administration solution enables you to turn disparate information into valuable data and actionable insights.

10 Signs You Need Fund Management Software

As a private equity firm, your team talks to many investors, track numerous deals, and monitor a variety of investments. Making organization key. Without the right fund management software in place, your job can quickly become overwhelming.

If you aren’t able to perform the activities below quickly and efficiently, those are signs that you need fund management software.

1. Store contact information. 

If phone numbers and email addresses for the people your organization contacts are spread out through various people’s personal address books, that’s a problem. That information must be in one, easily accessible location.

2. Track firm-wide activities. 

You’ve scheduled a meeting with a potential investor only to find out that your colleague was there a week ago. That’s awkward. And it doesn’t have to happen—and won’t happen—when you have a holistic view of what’s going on at your firm.

3. Work from anywhere. 

If the COVID-19 pandemic has taught us anything, it’s that you must be able to access your company’s database or shared drive from the road, your home, or anywhere.

4. Stand out from other firms. 

You need to demonstrate to potential investors that you have a regimented process that differentiates you from other funds. Specialized fund management software enables you to do that.

5. Keep track of PPMs and other fund documents. 

If you have to manually number PPMs and you don’t know which prospective investors you’ve sent them to, it’s time to get an assist from technology.

6. Leverage accurate, real-time data. 

Using spreadsheets to track your funds is risky for many reasons. Just one formula error can create significant problems. Fund management software eliminates that risk.

7. Keep your team in the know. 

It’s very inefficient to have to email colleagues to find out what happened in a recent meeting. You should be able to find that information quickly without their assistance.

8. Perform due diligence effectively. 

Too often, the steps in a firm’s due diligence process are not well defined and there’s no record of who performed each step. Fund management software can ensure this process happens the same way every time and that each action is documented.

9. Meet portfolio management requirements.

You need a system that can assist you when regulatory or compliance requirements force you to be more transparent in your portfolio management. Altvia answers can help you transform and normalize data.

10. Maximize your time spent fundraising. 

You shouldn’t have to spend more than 10 seconds compiling your pipeline report for investing or fundraising in preparation for your weekly meeting.

Learn More About Fund Management Software

If you’re seeing the signs that you need to implement fund management software, the first step is to learn about what’s available.

Request a demo so you can see our comprehensive private equity solution in action.

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 private equity 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 Private Equity 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 Private Equity 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 Private Equity Fundraising

Of course, your team will be best able to improve its private equity 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.

How to Close a Fund Quickly with Your Fund Management System

We’ve covered how top-tier firms use technology to improve communications and create a better experience for investors during fundraising. The next step is to close a fund with your fund management system. And as Henri Pierre-Jacques of Harlem Capital wisely points out, “Speed has become more valuable than capital.”

As a GP during the closing stage, how you share, store, and request document signatures is an opportunity to provide excellent service, accelerate the close, and build a strong relationship with investors.

Using technology to support all of the necessary back-and-forths when signing agreements and sharing documents can provide your firm with a competitive advantage.

To build trust with your investors, this document-heavy stage must be as streamlined and painless as possible.

A critical part of the job as you look to close a fund is to make the experience as seamless as possible for your LPs. The better the experience, the faster you can close.

Close a Fund Efficiently with a fund management system

The close is the most challenging stage in the fundraising cycle, according to Forbes. Broken term sheets can hurt your firm’s reputation, and if your initial investors back out, you’ll be forced to start over.

That’s why it’s imperative to have a central system to store agreements where everyone involved can access them.  You have to provide a secure, buttoned-up closing experience.

Altvia’s LP Portal, for example, allows you to:

  • Store LP agreements
  • Invite investors to sign agreements online through a secure login
  • Run reports to see which agreements still need signing
  • Set up notifications to remind investors to complete agreements and to let your team know when everything’s been signed

Even better, with a central system, you’ll be able to capture all of the terms of the agreements, so you can search and reference them for future communications and fundraising activities.

The Secret to Reducing Friction When You Close a Fund

The longer you take to close a fund, the greater the risk of losing investors. Thankfully, today’s central sharing solutions have built-in features that can make the close process fast and efficient.

Look for a solution that enables your firm to:

  • Find and share documents quickly, so your team can better manage investors’ questions—and respond sooner.
  • Know for certain who’s interfacing with your agreements and other resources, and when you’re dealing with decision-makers or competitors.
  • Reduce duplicative work being done by multiple people—and see who has shared which documents with investors.
  • Easily adopt compliance standards to meet increasing reporting requirements from investors and regulators.
  • Manage the process wherever you are with secure portal access across all devices, especially mobile.

Trying to keep everyone on course during the crucial closing stage can be overwhelming. But if you use the right technology, you can streamline your firm’s processes and close a fund efficiently and successfully—and in the process, develop strong relationships with investors.

And if you want to learn how successful firms have adapted to new business challenges and can close a fund remotely, check out our webinar The Art of Virtual Fundraising.

How Firms Can Promote Fundraising Activities Virtually

The Right Technology for Your Fundraising Activities

In order to be successful in raising a new fund, GPs must be able to engage their existing investors but also forge relationships with new investors for whom the fund would be a good fit. Historically, much of the work with fundraising activities have been done in person, since personal connections and trust are fundamental to success in the private capital markets. In fact, not surprisingly, two-thirds of investors say they would prefer to work with a manager with whom they already have a relationship.

Unfortunately, the COVID-19 pandemic—with its lockdowns, travel restrictions, and health concerns—has dramatically altered the private capital landscape and stakeholders’ ability to meet in person. And, even as life starts returning to something closer to “normal,” it’s obvious that there will be lasting effects from the crisis.

Survey Shows Few Fund Managers Have the Technology They Need

Were firms prepared for this type of event, with private equity technology that would allow them to keep working effectively even when working remotely? Generally speaking, most were not.

In a survey of 120 fund managers in March 2020, PEI learned that of those who were planning to launch a new fund, just 17% expected no delay in doing so. This is a clear indication that at the time of the survey, managers did not have the technology to support remote working and their private capital market workflows.

Essential Technology for Fundraising Activities

As fund managers who were caught flat-footed by the pandemic scramble to adapt, they have become very aware of the tools they need to succeed amid the uncertainty of a global crisis. This includes:

  • A centralized, easily accessible contact information database

Firms that had been using spreadsheets and group emails to keep track of investor information have learned that that approach is especially ineffective when you have a dispersed workforce and you can’t just walk down the hall to talk with a colleague about a particular investor or fundraise.

As a fund manager, you need a CRM that’s designed specifically for use in this business. Altvia’s CRM solution, stores information on current and prospective investors and the campaigns that have targeted them in a way that makes data highly secure yet easy for authorized users to find and access. That data can then be used to answer questions like, “What are our highest-converting fundraising campaigns?” and “What are the characteristics of our most committed LPs?”

What are our highest-converting fundraising campaigns?

What are the characteristics of our most committed LPs?

What’s more, the system tracks the stages that fundraises progress through. This visibility makes it easier for teams to work together toward a common goal.

  • An advanced communication tool 

When a fundraise becomes a virtual process, you need more than a simple mass email tool. Your digital communications are replacing in-person interactions, so they have to be personalized, informative, engaging, and well-timed. Correspond Market Edition enables you to craft and send impactful emails quickly and efficiently to a segmented list of investors, in part thanks to tight integration with your AIM database.

The system also provides accurate, up-to-date information about your outreach efforts. Who has received your email? Who has opened it? How many people clicked on a link in the email? The answers to these questions guide you as you fine-tune your communications to maximize their effectiveness. Plus, Correspond has unsubscribe functionality that helps ensure compliance with the rules and regulations around emailing and spam.

  • A virtual data room/LP portal

In difficult times, being able to provide fast access to important files is more important than ever. A virtual data room and portal specially designed for this market, like ShareSecure, not only enables you to provide investors and potential investors with key documents, you can also use the platform to do things like posting promotional videos of your firm sharing the news about a new fund launching.

In addition, you can embed a dashboard that displays your firm’s track record so that current and prospective investors can obtain information about you in self-serve fashion whenever they have a need for it.

Implement Advanced Systems to Improve Fundraising Results

Equip your team with technology to better engage current and prospective investors. Download our free guide, Creating an Excellent Investor Experience below. This guide covers how the market-leading private equity firms are differentiating themselves with technology to attract top investors.

How to Use Technology to Raise a Fund

The amount of time spent to raise a fund and perform due diligence has increasingly shortened over the last decade. 

The availability of capital has continually grown in recent years, which is one factor to shortened timelines. The number of innovative and potentially profitable startups has increased significantly as well. And those companies have the benefit of growth incubators and widely publicized events where they unveil their offering to a large audience, forcing decision-makers to act quickly or lose the opportunity.

However, just as powerful as these drivers—and perhaps even more consequential—is the availability of new technology and new tools to streamline the process. Much of the “legwork” previously associated with raising your fund can now be handled by flexible, highly integrated systems that enable you to gather, translate, normalize, and leverage data in a fraction of the time.

This time savings is especially important to smaller teams. As Private Equity International observed in its Perspectives 2020 report, “Fund due diligence requires the greatest amount of time for over half of investors. LPs are notoriously short of time, with very small teams—sometimes just a couple of people—fielding hundreds of calls and PPMs and co-investment requests.”

Effective Communication and Relationship Building

Technology can help you raise your fund faster is the assistance it provides in building and maintaining relationships. That starts with being able to capture the content of your interactions with organizations and individuals. Simplified tracking of notes from calls and meetings, as well as email correspondence, means you spend less time gathering information and more time acting on it.

Our Private Equity CRM solution, also manages the capital-raising process right from the first contact with investors. That includes automatically generating, sharing, and tracking disclosure documents.

The system also enables you to launch tailored fundraising efforts based on previous fund data. Plus, in-depth reporting and data visualization empowers you to monitor the progress of your fundraising communications in real-time, which helps you accelerate it.

Advanced technology streamlines the maintenance of relationships by automating repetitive and time-consuming tasks like sending emails. As fast as deals are moving today, staying top-of-mind is critical. Let a competitor replace you in that spot because you didn’t have the resources to provide the appropriate nurturing and you risk being left behind.

Display Your Fund Track Record

Investors have always been eager to assess a fund manager’s track record before making a commitment. The speed with which parties come to the table today has only amplified that need. Here again, the right technology can be a game-changer.

Business intelligence tools like Altvia Answers allow you to create dashboards that compile data from disparate sources so you can make a compelling case regarding your fund track record. It is said that 80% of the world’s data is unstructured. Bringing clarity to that chaos through a tool like Answers can be critical to raising your fund in a timely manner.

This dynamically updated single source of truth retrieves data on a schedule that you define in order to ensure accuracy and allows you to answer questions quickly whenever they are posed.

Then, with a virtual data room and GP-LP engagement platform like ShareSecure, you can provide investors the information they need to do their evaluation in a way that is very convenient yet fully protected with enterprise-grade security.

Not only does the combination of business intelligence tools and a streamlined information conduit help you deliver a complete investor experience and maintain positive forward momentum, but it can also decrease the number of requests you get from LPs.

Raise Your Fund Faster with Technology

There’s a better way to show off your track record. See how business intelligence tools can create transparency and provide LPs with the information they need to move forward confidently.

Now is the time to leverage technology to improve your operations, and the first step you is learning more about your options. Seeing Altvia in action can help bring its benefits into sharp focus.