Category: Private Equity Technology

Just this morning, at a roundtable of IR professionals from well-known private equity and venture capital firms, I asked the question “how many of you are using investor relations software to score or predict the likelihood of prospects to commit to funds you’re raising?”

For a good ten seconds, it seemed as if there would be no reply whatsoever from the participants, but ultimately one brave soul did offer up something more or less equivalent to a manually calculated, somewhat arbitrary, and highly subject to interpretation method they use to figure how engaged a prospect is or how likely it is for a prospect to actually convert via commitment.

I left the early part of my career in venture capital not to shame how firms in this market behave, but rather to take advantage of an amazing opportunity to provide technology to these firms; the result of which would create opportunities for the firms themselves to use technology as a strategic weapon. It is my belief that there have never been greater opportunities for investor relations software to change the way PE/VC markets operate than there are today, and I want to start with this concept of predictive scoring, just one basic example of the application of technology.

Measuring how engaged a fundraising prospect is with any given GP raising capital is something that is proprietary; in a world where enrichment providers abound and help save us the mundane, manual entry of data that is objective, there’s simply no way for measuring engagement that doesn’t involve proprietary technology. Said another way: an enrichment provider like Pitchbook, Datafox, Preqin, or CapitalIQ is neither fit nor able, to tell you about the correlation between the messages and channels you use to the likelihood of closing the target. Not in terms of raising capital nor sourcing investment targets.

There are a number of firms we work with that arrive at this, however, and they do so via a modern mix of CRM (the source for proprietary actions taken and other data) and proprietary analysis that most often takes the form of modern analytics applications within the investor relations software. Where yesterday’s CRM is oftentimes seen as a management-driven hassle that users have no choice but to use, today’s CRM is an important provider of critical activity-based data and their associated outcomes, and which provides data to capable analytics applications that in turn start to help us understand patterns and correlations between activities and outcomes.

Let’s look at a basic example of this within the context of deal sourcing efforts. On the surface, every outbound firm has its deal sources, and a certain number of them will be considered “proprietary”. Many firms even have a surface-level assumption about how many of those deals — from a given source — they’re able to close. Note that I’m deliberately choosing to avoid using the word “understanding” in favor of “assumption”. The way I’m defining “understanding” in this case can be widely interpreted, and a simple number of deals closed is a perfectly fair definition by anyone’s standards, but it is my belief that there’s a definition that most firms would prefer. That definition considers the following:

1. whether those deals are deals that are likely to close to begin with
2. where deals from this source get stuck and/or how much time is spent to get them closed
3. whether there are efforts and activities that correlate to increasing the volume of deals from the given source (if it is so desired!)
4. whether the time spent on deals sourced from a given source is actually worth the all-important opportunity cost of lesser-considered sources

I’m attempting to stay relatively high-level with these considerations, but the last question above is the most important because it begins to consider whether there is a more effective use of the same resources. An easy way to think about this is to understand — through proprietary data — whether there is a “better” source for your efforts. In this case, “better” may not mean higher volume; it may mean a greater likelihood of success, or greater return on investment. More importantly, consider whether increasing the activity and engagement with that source has the effect of increasing the volume of higher quality deals.

Let’s pause there for a moment, and take the same proprietary data and analysis and port it to our understanding of fundraising efforts. Which activities lead to the highest conversion? Which attributes (location, size, mandate, etc) lead to an increased conversion with new LPs? Which messages are most effective? What is the typical engagement path and how long does it take to get to conversion? Which activities should we be taking and when?

But where proprietary technology and data begin to get extremely powerful is when we combine these two examples and begin to tell fundraising prospects a data-driven story about how our story is unique and how we’re differentiated in our ability to find the best opportunities. If that is where it begins, it is most certainly not where it ends; armed with the ability to understand our proprietary data and analysis of it, there’s no reason we can’t expect to begin to better understand how to win more competitive deals, both in terms of understanding deal dynamics and in terms of our ability to communicate what makes us differentiated when presenting to management teams.

In a time where the world is attempting to automate as much as possible, we must be careful to understand and distinguish between the time-saving automation efforts, and the invaluable proprietary tactics and data that can’t be automated. The combination of these two, and the insight therein is where true differentiation lies.

Step 1: Choose a technology partner that understands your business. 

The first step in our process is to understand your business. While we’re experts in software implementation for private equity, each firm is unique. You’ll want to customize the software to mirror your specific business processes.

When you’re selecting a data management system and/or a software implementation technology partner, it’s critical to work with a team that understands your industry and has implementation experience from projects with many other fund managers. 

It’s equally important to understand every software implementation is unique. It’s necessary to spend the time in the beginning tasking the right questions and really set the framework for your tech stack.

Step 2: Formulate a data strategy for your software implementation. 

While it’s tempting to jump right into implementing new technology, you need to take the time to focus on the underlying problems that private equity software is meant to solve. 

Taking the step to formulating your data strategy before the software implementation process ensures that the solution you purchase will be properly implemented and configured to solve your specific data problems and to produce the insights your team needs.

Identify the specific problems you need to solve by answering the following questions:

• Which parts of your operation would be best served by enhanced data management capabilities?
• Who are the stakeholders who will benefit from a data strategy? How will they benefit? Why will the strategy benefit them?
• Where are there problems in your ability to generate and capture data?
• Which processes could be streamlined by or be better-informed by data?
• What data would you like to have but don’t currently?
• Where could technology be used to address internal processes that may be generating data that isn’t currently captured?
• Where and how do you currently store data?
• How usable is your data in its current format?
• Who do you depend on to make your data usable?

Step 3: Implement, test, and refine your solution. 

Now that your internal team and technology partner has a clear plan for how the data in your new software is going to be used, it’s much easier to successfully install and configure the system for your team’s needs.

Depending on the type of private equity CRM you’re working with and the level of customization needed, this step could take anywhere from days to weeks. During this time, it’s important to start communicating the changes the software implementation will create to members of your organization, particularly those that it will impact.

You will want to work with a technology partner that has experience in the type of software implementation you’re executing and that has extensive project management experience. 

If they have that kind of background, they will lay out timelines and key milestones to ensure that the project moves forward efficiently.

As the software implementation comes to a close, your technology partner and implementation team will need to test the software to ensure it’s set up properly and that workflows are behaving as expected. This usually involves “dipping a toe” into the data to see how it reacts in the system, then refining configurations as needed.

The effective software implementation will involve working with small segments of your data first, rather than simply turning the system on and letting it run. 

This ensures that everything is functioning smoothly, there are no “breaks” in the data management workflows, and that you can pull from the system any information or reports you need.

Step 4: Conduct employee training and promote system adoption in your software implementation

Many organizations tend to think that software implementation ends once the solution goes live and there is evidence that data is being passed through it successfully. 

But don’t underestimate the need for team communication and training as the system is being rolled out. There is no substitute for having actual users “bang on” a system and place the kinds of demands on it that they will in typical work scenarios. 

Training that is personalized for your team is much better for promoting user adoption than generic training. Customized sessions help people understand how they will use the system in their everyday work, and makes them more productive from day one. 

It also helps ensure that employees put “clean” data into the system when they use it so that the software continues to work properly for your organization. You want the solution to deliver the same amount of value years from now as it does today!

Leverage Technology to Build Confidence in Any Investor Relationship

One of the questions we get asked frequently by our clients is, “What are private equity best practices and what is everyone else doing that I should be doing?” To answer it, we offer our insightful Private Equity Technology Assessment.

This evaluation is based on the Business Maturity Model, which outlines key components to consider as you invest in and evolve your use of technology within your firm.

The 10-minute questionnaire helps you assess your current technology state. It also enables you to identify priorities for the future, since the industry is continually changing and the firms that succeed are those that stay on the leading edge of the technology wave.

The Altvia Private Equity Technology Assessment looks at five main areas:

1. Technology
2. Data & Analytics
3. People
4. Process
5. Sponsorship

The technology portion focuses on your technology investment and how your use of technology has evolved over time within your firm. Knowing where you’ve been and how you got to where you are today makes it easier to plot a course to where you want to be down the road.

The part of the assessment that covers data and analytics assesses data quality and how you and your team leverage information to drive insightful reporting. Success in private equity today requires that you do more than simply gather data—you have to extract the maximum value from the information you collect and generate.

The area dealing with people evaluates your usage and adoption of technology across the various solutions you use and looks at whether you have people in leadership positions tasked with driving your technology strategy. Obviously, even the most advanced technology is of no value if it’s not being used.

The process portion of our Private Equity Technology Assessment reviews how well your business processes and your technology align. When sound methodologies are supported by the right technology, your teams and the stakeholders they interact with all benefit.

Last but not least, the sponsorship area looks at the involvement of your executive sponsor(s). The oversight and encouragement from people at the top level of an organization are essential to the successful adoption of private equity technology.

For each of the categories, the assessment helps you determine where you stand. Are you in the early stages or “developing”? Have you progressed past “developing” and begun moving toward “emerging”? Or are you even more evolved and considered “strategic”? And for those who are especially progressive, the label “market leading” is applied.

The key with any carefully crafted assessment is that there is no “right” or “wrong” answer. Rather, the results fall somewhere along a continuum. It’s important to understand where you are today with your private equity technology and what changes you can make to better support your business strategy.

In addition, it’s crucial to be aware that there is a symbiotic relationship between and among the five categories in our Private Equity Technology Assessment—improvements you make in any area give a positive boost to the others. So, firms that are market leaders are focusing on all five areas to ensure that they maximize the ROI on their private equity technology.

Why Private Equity Firms Need a Clearly Defined Technology Strategy

The private equity industry is at a technological turning point. Every year, limited partners are demanding faster, easier access to information, while general partners are struggling with how best to use technology to support these critical investor relationships. Savvy investors are now expecting that informative reports and other materials be available via email on-demand or at a particular cadence.

Survey results from an EY Private Equity Study indicate that “more than 65% of firms are currently investing in (or plan to invest in) emerging technologies such as digital data delivery, advanced analytics or robotics.”

Another study from KPMG found that only a handful of larger firms “have already implemented or are currently exploring the use of digital tools and D&A to provide the edge.”

In short, successful private equity firms are increasingly focused on technology transformation and improved investor reporting to meet new demands. Every year, the importance of advanced private equity technology is more widely recognized.

For firms looking to capitalize on private equity technology more effectively in areas like deal flow management, fundraising management, and investor relations communications, having a firm grasp on how well they are leveraging available solutions isn’t a luxury, it’s a necessity.

While many companies think of data as a tool, it might be more accurate for private capital firms to think of it as a valuable asset. In your data—the names, facts, figures, and other details you have been gathering for years or even decades—are relationships waiting to be formed and deals waiting to be made. And, of course, revenue waiting to be collected! Plus, even a small amount of high-grade data can contribute to multiple wins over time. In that regard, having clean data in your private equity CRM isn’t just valuable, it’s priceless.

But your success in achieving your business goals is largely dependent on the quality of that data. If you allow it to get “dirty” or outdated, you decrease your ability to make deals and raise funds—and in doing so, you inadvertently give your competitors an advantage.

If, on the other hand, you ensure that your data is always “clean” and current, you give your firm a competitive edge. It may be a big advantage or a small one, but if your data quality contributes to a win, it was enough of an advantage and well worth the effort required to keep your records up-to-date.

Give Your Teams the Data They Need in your private equity cRM

In order to provide your teams with the high-quality data they need to work effectively, there are four best practices you should use as you pull data into a private equity CRM solution like Altvia:

1. Only import essential data.

It’s tempting to have a “more is better” mindset regarding the data in your private equity CRM. However, the reality is that anything that doesn’t bring value to your team and your processes is simply a distraction. Forcing people to sift through huge volumes of data to find the most helpful entries is counterproductive since it only slows them down.

Ask yourself, “Will we actually use this data in the future?” before you import it. If the answer is, “Yes,” the follow-up question should be, “How?” If you are unsure, don’t import it.

2. Use tools for mass uploads and updates.

The more time and effort you put into getting data into your private equity CRM and keeping it current, the more you diminish its overall value. Altvia integrates with the Force.com platform, which means you can use the Salesforce Data Import Wizard to get information into the CRMquickly and efficiently. All you have to do is drag a spreadsheet into the tool, do a quick review/edit of the mapping, and start the import process.

Similar processes are available for updating information. If you leverage them, people tasked with data management have more time to focus on other business-building initiatives. Plus, using these kinds of tools helps minimize the human error that is common with manual processes. One keystroke error in a critical piece of data can be very costly.

3. Use validation and enforce data requirements.

The best way to ensure that the data in your private equity CRM is in the right format is to require that it be entered correctly on forms. By putting validation on form fields, you can prevent things like extra digits in phone numbers, alpha entries where numeric data is needed, etc.

Also, if a particular piece of information is required in order to make a record complete, ensure the form can’t be submitted without it. You don’t want to have an urgent need for information you thought you had, only to discover that you don’t and will have to scramble to obtain it.

4. Delete duplicate data.

Both incorrect and duplicate data are problematic for PE firms that are trying to keep their data quality high. However, the latter can be a more subtle problem, since any of the duplicates viewed individually may look accurate.

Be sure to “deduplicate” the data in your private equity CRM regularly. Also, check any data sources you are importing so that duplicates don’t skew your numbers and adversely affect your predictions.

Improve and Maintain Data Quality

If you’ve never focused on data integrity—or have let a high-quality database degrade—it will surely take some time and effort to get it back to a place where it is delivering maximum value for your firm. The same is true if you still rely on information that is scattered throughout your organization in spreadsheets, emails, and even handwritten meeting notes.

But the work to populate and maintain an advanced data repository is a wise investment in one of your most valuable assets, and one that will pay big, ongoing dividends. That is, as long as you make data quality a top priority and commit resources to manage your information properly.

The good news is that once you get into a rhythm of reviewing the data in your private equity CRM and taking any necessary action (updating it, deleting it, etc.), it isn’t a very time-consuming process. An hour or so on a regular basis is certainly worth a greatly enhanced ability to close deals. And, if your team commits to entering and updating data correctly the first time, you’ll have to spend even less time keeping it clean, accurate, and up-to-date.

See how our private equity CRM can improve the efficiency of your data management and other business processes with a single source of truth built for private capital. Request a demo today or see how firms like yours use Altvia.

In this blog, we’ll discuss how to formulate an effective strategy for efficiently managing and accessing your private equity data.

Data is only as valuable as it is accessible and understandable. Without an effective way to manage information, it can very quickly become “noise.” And in some ways, that’s worse than not having the data at all, since it can hide valuable insights that you might otherwise have discovered.

To get the most out of your private equity data, take these four steps:

Step 1: Focus on Private Equity data problems you need to solve.

Start by looking at your organization’s business goals in order to identify what’s working and what needs improvement. And try to view things as an outsider would. It’s common—and probably the default mindset—to see the way things are as the way they should be, even if that’s not the case.

To clearly identify any gaps that should be addressed by a more effective private equity data management strategy, ask yourself:

• Which part(s) of our operations would be best served by more effective data capabilities?
• Who are the stakeholders who stand to benefit from a data strategy? How do they benefit? Why is the strategy beneficial?
• Where are there problems in our ability to generate and capture all the data we need?
• Which processes could be streamlined or better informed by data?
• What data would we like to have but currently don’t?
• Where could technology be used to facilitate internal processes that may be generating data that isn’t currently captured?
• Where and how do we currently store data?
• How usable is our data in its current format?
• Who do we depend upon to make our data usable?

Step 2: Understand your workflows.

Once you have a better feel for what you are trying to accomplish, consider where potential problems may occur and how best to address them. Where do your processes break down?

Here again, if your inclination is to say, “I think we’re good,” your perspective may not be entirely bias-free. It’s very rare to find an organization whose processes simply can’t be improved. There are always ways to streamline workflows, and in some cases, a major overhaul may be called for.

Looking at your current workflow, evaluate how you:

1. Access and/or connect to data
2. Prepare data to be properly analyzed
3. Perform analyses on and/or consume data

It’s important that you not take any shortcuts here. You’ve got to be sure you can trace the path that data follows from the moment it’s received or generated to the point where it’s been used as appropriate and is now stored for potential future uses. This has to include every stop or operation along the way.

Step 3: Dip your toe into Private Equity Data analytics.

Chances are, your current process is cumbersome and relies on manual input into disconnected systems. Raise your hand if your analysts are relying heavily on Excel spreadsheets? And raise it again if you consistently see #REF!

Today’s analytics solutions make it possible for business users with no technical skills to perform complex private equity data analyses in real-time and very intuitively. This saves you and your organization valuable time and resources.

With tools that allow you to access, prepare, and consume data more easily, analysts can make more efficient use of their time and talents—offering more strategic value to your firm and helping you differentiate from the competition.

Step 4: Get ready to demo private equity technology.

Now that you have a better idea of the benefits that more effectively managed data can provide your organization and what you are looking for in a solution, it’s time to explore what’s available in the marketplace.

There are solutions that bring together data from disparate sources in one place, then model the combined information to establish a “single source of truth” for all of the data across all of the systems. Even better, the right solution can connect to the data systems already in place, with no need to export or upload information, simplifying the process. In that way, everyone on your team has access to the same relevant, up-to-date information, anytime and from anywhere.

Solutions that allow you to connect and use multiple databases provide the best of both worlds: flexibility and customization. Effective use of data, coupled with a technology solution that is specialized for private equity firms, can help organizations significantly improve their use of time and resources, increasing efficiency and simplifying processes.

Altvia has developed a data and technology platform specifically for the needs of private equity firms:

The base of a modern technology platform is built on a single source of truth that supports key workflows, contact management, relationship mapping, and the automation of key activities (ie. emails and task assignments)

The intelligence layer connects, normalizes, and displays data across sources (ie CRM, Accounting, 3rd Party) to drive speed to insight.

Distribute personalized content like PPMs, K1s, and Capital calls with ease and enhance the investor experience with a secure portal underpinned by data-rich analytics.

Today, firms use interesting technologies to improve and quantify their processes but when compared to the vastly more impressive capabilities of modern data science techniques, Excel and Outlook just aren’t cutting it in the lifecycle of a private equity fund.

By far the largest latency PE firms face today, is the lack of connectivity across their operations. For example, most firms will have a detailed Excel file with a list of all the prospective LP contacts their ex-investment banking analysts and associates connected with back on Wall Street. 

Some of the more technologically driven firms might even send this file to an outsourced marketing company that sends generic emails to these potential investors in the hope they set a meeting with one of the General Partners. While time-tested, this way of dealing with investors is rudimentary at best when we look at all the possibilities of raising capital with a modern tech stack. 

Fundraising isn’t the only stage of a firm’s life cycle where robust data analytics can drive improved results. Efficiently collecting, storing, analyzing, and presenting data will vastly improve a firm’s performance at every stage of the process. 

Communicating to Potential Investors

Fundraising is the first and often one of the most tedious processes for a firm. During this process firms are hounded with problems, many of which determine whether or not the firm will survive; dealing with constant rejection from potential LPs, updating pitch decks right before a meeting with an investor, modifying the presentation of the firm’s thesis for each investor are just some of the many examples of something that can go wrong in the traditional approach to fundraising. 

Proper data analytics uproot many of these issues from the source. For example, Altvia allows you to create ideal investor profiles which can be matched to investors searching for firms increasing the chance of each LP meeting ending with a metaphorical ‘cheque’ so to speak.

One of the often-overlooked aspects of fundraising is the direct investor communications such as capital calls, firm updates, and even just meetings with the general partners all of which can be automated using the Altvia platform.

Private Equity Fund Pipeline Management

The next stage is to deploy capital. This stage is the one that the vast majority of people attribute to working in finance. In reality, deployment really only takes up 20 to 30% of the average analyst’s or associate’s job description.

Deployment is often characterized mainly by sourcing New Deals that fit the investment thesis. This can also mean thinking of new industry niches and creating industry reports to seek out new avenues for investment. 

The implementation of software here, however, is there exists a massive amount of data spread out over multiple sources that can be quantitatively analyzed to immediately source, contact, and analyze prospective Investments.

Altvia consolidates these data sources to create a dashboard of the most current Private Financial information for GP’s to use. Improve deal flow by ranking and sorting deals depending on attributes, attractiveness, and stage in the deal process. 

Portfolio Performance & Analysis

Managing already made investments constitutes the vast majority of what a PE firm does. Analyzing/adjusting investment company operations, identifying new strategic acquisition targets, and generally improving the profitability of Investments is the real meat of the job.

The unique perspective that PE holds over investment management is that these firms have an inside look at both the company and the industry. Altvia optimizes this perspective to minimize inefficiencies in investment companies by comparing them to comparables in their space at every level of the company. 

Another advantage software gives PE firms is the quantitative method by which they’re able to analyze a company’s operations. Today, most investment companies have multiple sources of revenue, an ever-changing list of costs, and a medley of very different operational tasks. 

Connecting these disparate data sources always allows you to perform machine learning and other modern data analytics techniques to dynamically predict which operation desertions will end up helping or hurting the investment company. 

Instead of outsourcing operational management or having investment companies evaluate themselves, an upgraded tech stack can help PE firms get more in-depth and personal control over their Investments. 

Private Equity Fund Performance & Analysis

Once the majority of operational decisions have been taken and value has been added, it is time to analyze the fund’s performance. Most notably, this entails creating accounting reports, tax statements, in-depth capital structure statements, and other general reports necessary for the fund’s exit in the investment. 

Consolidating this data into these accounting reports is a time-heavy task and an expensive one at that. Hiring an accounting firm to keep a track of a firm’s cash flow is a heavy recurring cost. Altvia’s centralized data collection, storage, and analysis are able to support data collection and support the collection process.

LP Engagement

Finally, the last stage of a firm’s life ties back to our first one, Investor Feedback.

IR is the real backbone of a firm and so having efficient, centralized software to manage it is ever more crucial. Announcing post-exit earnings to investors is a very exciting period for a firm and it should be treated as such. 

Furthermore, transparency with investors after an important exit is also crucial and so an investor dashboard is an essential part of any tech stack. 

An investor dashboard provides a way to self-serve metrics to track data visualization. Limiting LP requests for your IR team.

Combined with the aforementioned announcement and automation, Altvia’s software allows firms to focus on what matters most, financial analysis and value creation.

Why the Leading CRM Needs Altvia

Many firms reach out to Altvia after having tried Salesforce’s out-of-the-box functionality as a substitute for true fund management software and find that the system doesn’t work for alternative investments

This isn’t to say that Salesforce doesn’t have powerful features—some of which are applicable to this industry. In fact, our data management tool is built on the Salesforce platform.

We chose to partner with Salesforce when we developed AIM, and have continued that partnership because the system’s robust infrastructure allows us to provide a premier software solution tailored specifically for private equity.

Salesforce Alone Isn’t True Fund Management Software

We’ve found that there are five primary reasons that Salesforce, straight out-of-the-box, does not work effectively for fund management. Some firms certainly use it for that purpose, but the key is using it “effectively.” 

How much time do those organizations waste each day/week/month on inefficient processes, miscommunications, and functionality “workarounds”—time that could be spent on more productive tasks? It’s an important question. The answer is dictated, in large part, by these five factors:

1. Salesforce is designed for “typical” businesses that sell products and services.

Salesforce out-of-the-box comes with standard objects such as Leads, Accounts, and Contacts. It doesn’t include objects specific to fund management software that support deal flow and investor communications.

2. The terminology and fields are not specific for fund management.

Fund management and purpose-built fund management software use a unique vernacular to describe both the stages of fundraising and the stages of committing to a deal. 

Salesforce out-of-the-box uses traditional sales-related terms such as “qualified” or “booked.” This forces users to adapt to the generic language, which creates a confusing and ineffective fund management system.

3. Connections between relationships aren’t tracked.

Success in the alternative asset management space is based on the quality of the relationships that you maintain with LPs and fund managers. Salesforce out-of-the-box doesn’t allow you to track relationships and the connections between relationships to the extent that most fund managers require and that true fund management software does. This results in gaps in information and connections that might derail a deal.

4. Funds can’t be tracked independently from accounts.

Out-of-the-box, Salesforce can’t differentiate between an account and an investment that an account might make. This means that if an account could potentially make an investment in more than one of your funds, Salesforce would consider those two investments as two distinct accounts. As you can imagine, this creates serious confusion in the deal management process.

5. There’s no distinction between funds in different states.

In a fund management CRM system, most fund managers like to keep a record of not just the funds that they are considering, but also the funds that they passed on or funds that they did not consider. Out-of-the-box, Salesforce lumps all opportunities into one sales funnel. This is a limitation that fund management software shouldn’t have.

So, again, Salesforce is the perfect foundation for fund management software—it just isn’t the perfect fund management software by itself.

Fund Management Software from Industry Experts

Salesforce does not, of course, claim to have extensive expertise in fund management or fund management software. But they don’t have to. At Altvia, fund management software is our sole focus and a solution that we’ve been providing to industry professionals for over a decade. 

Altvia’s integration with Salesforce creates powerful synergy that gives users the backend horsepower and frontend finesse they need to do their job efficiently and effectively. 

The solution enables fund managers to track the interactions of investments, monitor portfolio performance, and create integrations with other systems that give them a competitive edge over firms that continue to just “get by” with a less-than-optimal solution.

Is Altvia the right fund management software solution for your firm?

Contact us and let’s talk about your challenges and how we can address them.

I love dinosaurs, and because it may come off as weird to say that I also “love” analogies, I’ll simply say that I find analogies to be very helpful and I use them a lot. It comes as no surprise to me, then, that dinosaurs are often the source of important analogies; don’t let it surprise you either — this is not the first time I’ve suggested that private capital markets are analogous in some form to dinosaurs. It turned out to be the perfect analogy for describing where data-driven venture-backed IPOs have gone.

Based on what we know, Dinosaurs are the most prolific creatures to have ever inhabited the earth — the success they had in evolving is the ultimate case study in adaptation. Our track record as humans, when comparing the time we’ve been here, doesn’t even register as significant. It’s no wonder, then, that their seemingly sudden disappearance is a marvel that sets up as analogous for wondrous, and yet catastrophic events. Even kids seem to be born with a fascination for these legendary creatures well before they know anything about their amazing story or their sudden demise.

A few weeks back my colleague and friend Kjael Skaalerud penned an amazing piece about the digital collision coming for VC/PE. Equal parts prophetic and doomsday, I simply can’t help but wonder how one could read this piece and see any analogy other than the proliferation and subsequent downfall of the dinosaurs. It doesn’t stop there, though; reading it causes me to wonder things like “how did this happen?”, “what was it like before this?”, etc. Let’s be archaeologists and see if we can find out!

First allow me to set the proper context by summarizing Kjael’s piece, in which Kjael warns us that digital transformation is happening everywhere as software eats the world. There is no hiding; the conveniences afforded by top-tier firms that weren’t as digitally-focused and which allowed them to remain at the top are simply no match for the opportunities that technology-focused firms will take advantage of in the future. It’s a compelling argument and if that’s what the future looks like, I’m here for it.

I don’t inherently believe that anybody at the top should fall, quite the contrary really — I’m a capitalist at my core and believe in survival of the fittest above all things. I have no agenda when it comes to which VC/PE firms survive and/or thrive; I simply believe it’s undeniable that what has differentiated top-tier firms is no longer the best evolutionary predictor. Still today, but certainly up to this point, the most successful PE/VC firms — as measured by historical quartile-based performance of funds — was largely self-fulfilling.  LPs want access to top-quartile managers, and the best way to predict that, but without any guarantee, is by finding those that have generated top-quartile returns in the past. To be sure: there is no flawed logic in this; it’s simply the best predictor because there isn’t yet one that is better. 

That is why I subscribe wholeheartedly to Kjael’s prediction. It suggests there’s a future for data-driven firms in which technology offers a better predictor of this, and in the simplest explanation possible, that is: data-driven stories that prove differentiated access to investment opportunities, differentiated ways to add value, etc. and on top of it all, the compounding effect of data proving the repeatability of the same story that the data began by uncovering. Turns out that just this week, early support — according to the way I interpret it — for this thesis has emerged by way of a Pitchbook story about Hedge funds being quicker to move and paying premiums over traditional venture capital firms to back high-profile venture-stage companies.

While historical performance is at the core of these PE/VC market dynamics up to this point, it’s not the only archaeological evidence that is interesting. Perhaps at the core of the entirety of the existence of this market is what I’ll describe as a sexy opacity. It has always been known that this market moves quickly, efficiently, is relatively exclusive, generates outsized returns, and yet very little is known about it within the general public. To me that seems — if I were to channel an analogy — a bit like that famous item at the world-renowned restaurant you’ve heard somebody gush about. Nobody actually knows how that thing is made, and there are legitimate concerns it will stay that way when the only person that does know dies. That’s sort of intriguing and sets up nicely for something we become enamored by, perhaps even if the story itself helps to compensate for the mediocre quality of the item itself. While I personally happen to appreciate the mysterious, slightly opaque dynamics of private markets, it feels like it’s fair to wonder whether there is a recipe at all for reliable and repeatable success in this market. If there is, I’m led to wonder whether it will be able to hold up against the impending technology-led transformation that will bring data and speed to the forefront.

Predicting the future of data-driven firms is a tricky business; oftentimes changes happen so gradually that we feel — at any given point along the evolution — that the future isn’t quite as futuristic as we imagined it. These evolutions happen slowly and gradually, but if we are to stop for a moment, I think it’s fair to suggest that we already see evidence that the collision is coming: we’re starting to see technology- and data-driven firms move faster, with greater conviction, and it’s only just beginning. It only feels appropriate to use a phrase Kjael uses often if you spent time around him, “let’s put our mouth guards in and get ready”.

A Good Executive Sponsor is Essential

Software implementation of any type requires planning, technical setup, training, and change management. These actions are particularly important for fund administration software implementations. 

However, none of them can be done effectively without proper buy-in from all levels of the organization. 

Unfortunately, many companies assign software implementations to employees who don’t have the knowledge or expertise to properly understand the full scope of the project. 

These people also may not have the authority within the organization to secure the necessary resources to get the job done. 

Consequently, having a good executive sponsor is critical to a successful fund administration software implementation.

What is an Executive Sponsorship in a Software Implementation?

Executive sponsorship is a term commonly used in project management that refers to a situation where a senior-level executive is responsible for the business success of a project.

In software sales, typically a small number of stakeholders are involved in making the decision whether or not to purchase a product. In most cases, this decision will impact a much larger portion of the company. 

In the case of a customer relationship management (CRM) tool, for example, the selection impacts almost everyone in the organization. A CRM software implementation can be a daunting task that not only requires things like technical expertise and user training but change management as well.

Having an executive sponsor on the software implementation team significantly increases a project’s likelihood of success. For one thing, it helps ensure that the software is being set up in a way that will support business needs at a higher level of the organization. 

This oversight also promotes the adoption of the new product at whatever scale is appropriate.

Why is a Sponsorship Important?

At Altvia, we work with people in a variety of roles during the sales process, depending on the firm—CEOs, managing partners, data analysts, heads of investor relations, and others. Most often, an engagement is initiated by associates or analysts who realize there is a better, more efficient way to address tedious, manual data entry. 

They conduct extensive research into which tool is the best fit for their firm, thoroughly vetting the company they choose before the software implementation begins. 

(Note: If you are currently in this process, our free Buyers Guide to Private Equity Technology can be extremely valuable to you.)

However, after the purchase decision is made, all too often the responsibility for integrating the product into the company’s operations is carelessly tossed to lower-level employees. This can occur for a number of reasons. In some cases, these team members are perceived to have more time available. They may also be assigned the task as a form of “paying their dues” or, more positively, to help with their professional development and add to their understanding of the organization’s operations. 

Whatever the reason, a few things usually happen at this point. The firm must assess its data quality in order to extract old information from its original source and seamlessly transfer it into the new system. 

Often, it is during this process that people have some realizations about the quality of their data. There may be contacts that are duplicated several times, they may not have had all the right information in the right fields, or they need to define additional fields in order to create accurate and clean reports. 

Then, frustration sets in. Team members who also have day-to-day tasks on their plate start to feel overwhelmed with the amount of work necessary to ensure the software implementation is successful. 

Generally, the reality is that the task isn’t as daunting as it seems. But nevertheless, this perspective affects their opinion of the new system. 

As a result, they struggle to see the new system’s potential and may be less likely to begin using it and less interested in taking the time to learn how to use it effectively.

An executive sponsor understands these types of software implementation roadblocks and knows how to lead team members, and the organization as a whole, around them. 

How to Engage an Executive Sponsor in a Software Implementation

So, who needs to be involved in a fund administration software implementation? From our work on countless projects, we recommend having:

• A senior-level champion to guide the process and lend support. They should be engaged as needed to keep the project moving forward, but not weighed down by small details. So, as described below, providing them with clear, concise information, and queuing up any challenges the software implementation team faces in a way that the sponsor can address them effectively is essential.  

• A mid-level employee who is more hands-on with the firm’s technology and applications. This person still should be senior enough to understand all of the firm’s “moving parts” and how business processes work independently and within overall operations. They must know what data needs to be tracked and also have enough authority within the organization to effectively engage other senior executives for feedback.

Keep in mind that effective communication is key for every employee affected by a software implementation. That includes interacting with the executive sponsor as needed. 

Here are some tips for engaging your executive sponsor during a software implementation from the Guide to Project Management:

1. Be trustworthy: Trust is built over time, but it’s very valuable. Executives will be more inclined to engage with you and the project if they trust what you are doing. You can earn their confidence by delivering on your promises, completing tasks, and showing that you know what it takes to get things done.
2. Be structured: Being organized in the way you plan, communicate, and execute helps set expectations (and also helps build trust!). It’s easier for an executive to engage with someone they know isn’t going to waste their time by being disorganized.
3. Be clear: Ditch the jargon and technical terms in your communications with executives. They don’t have time and probably won’t have the patience to try to figure out what you’re talking about. Keep it simple, clear, and concise.
4. Be transparent: Hiding problems is a bad strategy at any time, and working with an executive sponsor on a software implementation is certainly no exception. Be transparent about problems the project is facing so the sponsor can determine how to help you. Plus, an executive would much rather know about a problem upfront than be blindsided by it down the road.
5. Be flexible: Every person—like every software implementation—is different. So, be adaptable in your communication type and style. Some sponsors are more formal than others. Some prefer somewhat more detail while others will only listen to an overview. Make sure you’re tailoring your communications and expectations to the project and the sponsor.

It is difficult to understate the significance of executive sponsorship in a fund administration software implementation project. Identifying the right sponsor is an important part of the planning phase. It is a decision that you should not take lightly. 

Without the right people backing your decisions and driving the implementation in the right direction, even the ideal software solution can fall flat and wind up being rarely or ineffectively used in a year. Or worse, it can be discarded altogether, resulting in a significant waste of time and money.

Looking for more information on how to transition your data from Excel or your legacy software? 

Altvia’s advanced platform solution built on top of Salesforce utilizes Force.com’s Account/Company and Contact features. Altvia takes the functionality further with proprietary integrations and interactions to migrate data. This includes connections with products like email marketing, an LP portal, and our data visualization tool. 

The result is a solution that enables firms to raise and deploy capital effectively, maintain compliance, and deliver a secure, reliable, and transparent experience to stakeholders and investors.  

First, however, you have to migrate data into the system. 

In order to make that process easier, our team of experts compiled their knowledge of Salesforce (SF) into clear, concise instructions.  

Use this guide to migrate data, including documents and attachments, to the Content section of Salesforce.com and you can be operational and productive in no time.

Note: there is a per-day limit of 5,000 files for Content submissions as you migrate data.

Covert the org to use content

• Enable Content and add all users as Content users.
• Replace Attachments-related lists throughout the system and add related lists for Content (done by adding a lookup to the objects as custom fields on Content-Type layouts).
• No new attachments can be added during the migration. You might have to do this after-hours to limit disruption.

Exports you will need to Migrate data

Attachments & Document Files: Start by doing a full Export including all files from within SF. This will get you all the attachments, documents, etc. named by their record ID in SF.

• Setup->Data Management->Data Export->Export Now.
• Be sure to check “Include in Export” at top and “Include all Data” at bottom.
• Note: If an export has been done in the last 48 hours, you will not have the option to “Export Now”. You will have to wait.
• The Export will complete in 5 minutes to 2 hours depending on its size and SF system availability, and an email will be sent to the app-xprod email address. Alternatively, you can periodically refresh the page.
• One or more .zip files should be on the Data Export screen after it has completed.
• Download all of them…they will only be available for 48 hours.
• Place the .zip files somewhere on your local machine.
• Extract all of them within a folder:

1. Will result in multiple .csv files of the data. These can be deleted or filed elsewhere.
2. Will result in an Attachments folder with all attachments. You will need these. Make sure they are all in the same folder.
3. Will result in a Documents folder with all documents. If migrating these, you will also need these.

Attachments Data.csv: Export all current attachments in Data Loader. Exclude the column “Body” from the export.

• Keep the original Attachments export .csv in a safe place. You’ll probably need to refer to it.
• Verify the number of Attachments in this export matches the number you have in the Attachments folder from the Export. Ditto if you are also migrating Documents. 

ContentVersion.csv: Export the current CONTENT (Content Version) table in Data Loader. Exclude the column “VERSIONDATA” from the Export.

• Keep the original file as you’ll probably need it later. 

Build your import file

Build your Content Version .csv by first exporting a test record from the Content Version table in data loader. Exclude the “VERSIONDATA” column from the export. Include the following columns or delete the rest after export.

• ID: Unique ID of Current version of Document that is displayed when you click on a document. Will be blank in the import file.
• CONTENTDOCUMENTID: Unique ID of a Content Document. Different than above. Will be blank in the import file.
• TITLE: This is what the document will be called. Title of the document from the Attachments table or other sources.
• VERSIONDATA: Full file path to the document being inserted without file type extension (i.e. C:ClientsAttachments0PA000002gpI3Mai). See Helpful Hints below. Must be populated and without file extension.
• PATHONCLIENT: Full file path to the document being inserted with file type extension (i.e. C:ClientsAttachments0PA000002gpI3Mai.pdf). This tells Content what the file type is so that the document can be previewed in SF. If the extension is not assigned correctly, the import is pretty much worthless. See Helpful Hints below; Must be populated and with the file extension.
• OWNERID: In the case of attachments related to other records, this is the owner id (18 char) of the other record, not the attachment (depending on how attachments were loaded, you may be able to simply take the owner of the attachment). This is because some attachments have the owner as the Admin if they were loaded via an API call. You want the actual Owner, as any security in the org is driven off of that (Requires additional vLookup to the export of the related records tables); must be populated.
• FIRSTPUBLISHLOCATIONID: This is the workspace ID (18 char) that you are inserting each document into. Must be populated.
• RECORDTYPEID: This is the ContentType ID (18 char) of the Content-type you want to assign to this document. Must be populated if more than one Content-Type defined in the org. Otherwise, it defaults to General and you don’t need the column.
• ALL APPROPRIATE LOOKUPS to other objects (i.e. Contact__C, Account__C). Optional.
• ALL APPROPRIATE FILTERS (i.e. Document_Type__C, Year__C. Needs to be populated manually if you want to filter information. Optional.
• ALL APPROPRIATE LEGACY IDS: We like to add the id of the document from where it came from (may be internal or external IDs). Optional, but highly recommended.

Helpful hints before you migrate data

• Build your VERSION DATA: Add the static path in one cell in your .csv (i.e. G2 has “C:ClientsAttachments” in it). Add the appropriate attachment ID for this document (i.e. H2 has “00PA000002gpI3Mai” in it). Build the file path by using concatenate function below; G2&H2. Should result in C:ClientsAttachments0PA000002gpI3Mai.
• Determine File Type: Use formula below to extract the characters after the period at the end of the title of the document to grab the file extension. A2 is the cell reference containing the Title of the document that has an extension (i.e. Sample.pdf); =RIGHT(A2,LEN(A2)-FIND(“^^”,SUBSTITUTE(A2,”.”,”^^”,LEN(A2)-LEN(SUBSTITUTE(A2,”.”,””))))); Result should be “pdf”. Eyeball all the results for sort by the results as many times you get “.pd” or “.xl”. Fix the title of these documents so you get a legit file extension.
• Build your PATHONCLIENT: Concatenate the contents of VERSIONDATA that you already built (C:ClientsAttachments0PA000002gpI3Mai) with the result of the file type you have determined (i.e. “.pdf”). Use concatenate function to give you the following result (i.e. =G2&”.”&H2…note the addition of period in quotes); C:ClientsAttachments0PA000002gpI3Mai.pdf.
• Data Loader 21.0 does not report on “File not Found” Errors. It gives you no error or success file record for this situation. Suggest using Data Loader 20.0 for loading of Content Version table.
• CSV’s are finicky. You cannot have more than 1 worksheet in a given .csv. Well, you can, but when you save, it will delete all but the first.
• VLOOKUP: Excellent function. You will need to use it.
• FIXID: If you happen to have 15 char ids, you can use Excel function =FIXID(A2) where A2 contains the 15 char id.

Following the instructions above will help you migrate data more efficiently and give you positive forward momentum in implementation and product adoption.