Debunking The Top Private Equity Software Myths

With Proper Configuration and Training, Salesforce Absolutely Does Work for Private Equity

Salesforce was recently named the #1 CRM for the sixth year in a row. This distinction is high praise for the company that absolutely dominates the market. But reasonably, it remains questionable regarding the challenges using Salesforce for you private equity software.

It’s true there are significant pain points for private equity firms that are trying to work within the Salesforce “mold”. But these “pains” can be overcome by partnering with a team with the technology to make this best-in-class CRM work for private equity firms.

Common Misconceptions About Salesforce for Private Equity Software

The first misconception about Salesforce is that it’s too unwieldy and complicated to be effective. This is a misconception that spans all industries, and private equity is no exception.

The issue that most firms run into with Salesforce is improper implementation and training. Any new tool you implement in your organization needs to be managed properly. Taking the time to sit down with key stakeholders to assess needs and map out key goals, milestones, and project owners will significantly increase the success of the new technology. It is also a good idea to hire an employee or an outside consultant with expertise in that technology to help with the implementation and customization.

While it may seem like Salesforce competitors make technology implementation easier—or even “turn-key”—the reality is that they all need implementation support. We’ve all heard the saying, and this is no different, you get what you pay for. More often than not, a company will start with a more “simple” solution, then quickly realize that it does not work once the firm grows, which they then have to go back to the drawing board for a new solution.

Salesforce is perceived as being over-complicated because it is highly customizable and scalable for any organization, no matter the size or industry. But most of the time it doesn’t fit perfectly “out of the box”. 

This is where the second common misperception comes in. Many organizations purchase Salesforce and expect it to be implemented “automagically”. This simply is not the case. In our experience, people purchase Salesforce because it was recommended to them by a friend or colleague. But the decision-maker usually isn’t going to be the person or part of the team of people implementing it. So, they tend to have an overly simplistic view of what it is going to take to make the tool work for their organization. This dynamic is acute in the private equity industry, where CRM and reporting needs are very unique compared to other organizations.

Challenges of Using Salesforce

It’s true that Salesforce simply was not built specifically for private equity software, and many private equity firms have come to believe that this makes it a poor tool for their needs.

Simple examples of this are the Account/Company and Contact record types that are core to the sales and reporting process in Salesforce. For years, private equity firms have struggled to fit their fundraising and investor relations processes into this mold. The result has been frustration, inefficiency, and wasted budget. Private equity managers need a solution that is tailored to their unique processes of fundraising, capital management, due diligence, and more. Salesforce out of the box simply does not provide this structure, leading to deepening frustration from their PE customers.

Additionally, the support team at Salesforce does not understand the private equity industry. So, when someone needs help building a report and pulling data, the support team is ill-equipped to help them. Initial and ongoing training from Salesforce are not clearly beneficial to admins working for private equity firms either, because they are tailored toward more “traditional” company sales and customer success processes.

Bridging Salesforce with Altvia

Kevin Kelly, the Founder and CEO of Altvia, experienced all of these misconceptions and challenges himself. And the team at Altvia witnesses them every day in the conversations we have with prospects and clients. We built our product using Salesforce as the foundation of our CRM for PE product because it is the best CRM available on the market. But, we knew it could be better for our private equity brethren.

Altvia’s CRM, doesn’t force you to try to fit into the Salesforce mold. We’ve developed proprietary record types, reports, dashboards, and more that makes Salesforce work for you. AIM provides 360-visibility by connecting accounts and contacts to deals, funds, and investor records. It manages the capital-raising process from start to finish, providing 100% clarity on the prospects you’re working with and those you’ve received commitments from. Using AIM, you can follow real-time fundraising progress, and automatically generate, distribute and track PPMs.

But Altvia doesn’t just sell you a product and move on to the next sale. Our implementation and support team is second to none. Our support team exists to help our clients properly implement and customize AIM, and build dashboards and reports that are crucial to their own business processes. The team knows our products, Salesforce, and the private equity industry inside and out. We speak your language. So, when you call us saying you need to print your PPMs we know exactly what you’re looking to accomplish!

Find out how Altvia’s CRM can help your firm grow by scheduling a demo today.

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.

investor relations