Case Study: Crosslink Transitions To Altvia For A Centralized Fund Management Database

Established in 1999, Crosslink Capital is a technology-focused, San Francisco-based investment firm whose investments range from early-stage private companies to well-established public corporations. Prior to using Altvia’s fund management system, Crosslink had been managing its fundraising and investor relations processes using Excel.

The Challenge

As they grew, they migrated to a Salesforce database so they could consolidate all of their investor data into one location that was accessible to everyone and that was dynamically updated. This solved the problem of having investor data stuck in everyone’s email inbox or in their personal calendars and also eliminated the multiple versions of spreadsheets that inevitably were created to manage investors. It also allowed them to see what interactions had taken place with each client so fundraising tasks weren’t duplicated but at the same time ensuring that no opportunities were ignored. When they initially started using Salesforce, Crosslink brought in a Salesforce consultant to customize the fund management software for their business.

Almost immediately, confusion arose about how best to store data in Salesforce and how to structure that data for Crosslink’s needs. For example, Crosslink’s investor base is made up of a number of large organizations that often have smaller subsidiaries or divisions that need to be tracked and managed separately. Data on these smaller divisions, however, needs to be rolled up to the umbrella organization so that Crosslink can understand the entire organization’s portfolio and what fundraising activities have taken place throughout the organization. According to Joel Hausman, Crosslink’s Partner in Marketing & Client Relations, the Salesforce consultant did not adequately understand their needs and, as a result, their Salesforce implementation did not effectively track the hierarchies that existed within their clients’ organizations. Says Hausman, “We really needed someone who understood our industry and who got what we were saying.”

Crosslink’s Salesforce system also did not provide timely information on their clients and each client’s investments. When a client called with questions about their account, for example, the Investor Relations team had to go to the accounting team and have them put together a report that provided the information they needed. Often it was one to two days before the IR team could get back to the client with answers, during which time the investor’s confidence in Crosslink could potentially fade. And finally, Crosslink’s previous Salesforce system was not set up to properly manage the two separate fundraising models that accompany managing both a Hedge Fund and a Venture Fund. “Fundraising for a Hedge Fund is continuous with no closing schedules,” says Hausman, “and then you have a venture fundraise which does have specific timelines and its separate unique processes.” They needed a fund management solution that would easily separate Venture prospects and Hedge prospects.

The Solution

Hausman and the Crosslink team came across Altvia on the Salesforce AppExchange when they were looking for a happy medium between the rigidity of an out-of-the-box Salesforce solution and a custom-built solution. And they were looking for a fund management system, and partner who understood their business. “Most of the consultants we talked to just asked what we wanted and said they’d build it for us,” says Hausman. “But what we wanted was someone to tell us what works best in the industry, what other groups have used, and how they have ideally set up systems that work at other organizations like ours.” And they wanted to have a fully functioning system in less than three months.

Crosslink’s Altvia implementation was set up to consolidate all of their investor data into one location so the fundraising team knows what investors have been contacted and what investors need to be contacted. Altvia was also configured to account for the various hierarchies of companies in their database so data could be stored in an orderly and efficient manner. To help the Crosslink team delineate between venture and hedge fund clients, their subscription was configured with a simple checkbox that could toggle a prospect between a venture prospect and a hedge prospect and change the fields that were required for each. “It allows no relationship in fundraising to slip through the cracks,” says Hausman. Going forward, they will be able to analyze multiple data points to determine where their fundraising efforts have been most successful and what types of investors are most likely to invest with them. “Based on this data, we will now be able to focus fundraising efforts to be more successful in subsequent fundraising opportunities,” says Hausman. “We now have clear and accurate historical documentation of fundraising efforts and IR communications as a reference before speaking with investor or prospect.”

Crosslink can also now use Altvia to get instant access to any given investor’s account information without having to go through the accounting department. According to Hausman, Crosslink investor portfolios can consist of public hedge fund investments, private venture capital investment, or a hybrid investment in both public and private companies, and many consists of all three. “Financial reporting for public investments differs from that of private investments. We needed a solution that could blend the two together,” says Hausman. “Altvia has up-to-date performance metrics for all of our investors and their investments so it calculates performance returns and gives us investment summaries on all our investors regardless of their investment vehicle.” “During the IR process,” he continues, “Altvia helps us inspire investor confidence simply because we can answer investors’ questions in a shorter timeframe than a couple of days.”

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

fund management system