Communication Tools to Build Relationships During a Capital Raise

Being effective when executing a capital raise is essential. What’s the key to obtaining funds? Relationships.

The availability of capital has been high. However, in order to get the right investors, you have to build strong relationships. Building and maintaining those relationships requires the right communication tools and processes.

Managing Investor Information Effectively

In order to be prepared for a capital raise, the first step is to gather a list of potential investors. And just as important as finding information on them is saving that data in a customer relationship management (CRM) system specifically designed for the task. AIM, Altvia’s Private Equity CRM solution, integrates with the platform and provides functionality specific to the Private Capital Markets.

Next, it’s important to create a “coverage report.” This type of report, available in AIM, allows fund managers to plan and track all the activity with a prospect.

For example, it shows the last time they spoke to the prospect and lets the fund manager set follow-up tasks. This is important since the right contact frequency is fundamental to building strong relationships. Reach out to a potential investor too frequently and you risk irritating and alienating them. Fail to reach out to them frequently enough and you risk losing their attention and interest.

Making Prospective Investors Aware of the New Fund

After creating your prospect list and developing an outreach strategy, the next step is to contact prospective investors, and efficiency is key, especially if you have a large number of prospects. Altvia Correspond Market Edition provides an array of features that streamline and simplify mass communication initiatives.

For example, it offers a smart list builder with full AIM integration and real-time contact syncing. It also provides auto de-duplication to ensure that prospects don’t receive the same communication twice and advanced scheduling so you can queue up a mailing and move on to other tasks confident that the blast will take place as planned.

Sharing Files Efficiently

As prospective investors begin to show interest, it’s crucial that you are able to share a private placement memorandum (PPM) and other documents with them quickly and securely. Delayed or awkward handoffs of important forms and information don’t, of course, build confidence in investors. That’s why it’s necessary to have a portal built for this purpose.

ShareSecure, our virtual data room, and GP-LP engagement platform demonstrates that your company embraces advanced technology and values data security—two characteristics that create trust in prospective investors. The ability to securely share all types of files (documents, audio files, videos, etc.), customize user permissions, request, capture, and track digital signatures, and provide document access from mobile devices are just a few of ShareSecure’s features.

Communicating Your Track Record

What prospective investors are looking for from you in the course of your verbal and digital communications is answers. The faster and more fully you can address their inquiries, the more quickly they can reach a conclusion on whether to provide capital.

Altvia Answers helps you give them what they’re looking for so they can make a clear differentiation between you and others vying for their funds. That includes powerful data visualizations that make it easy for busy investors to take in key facts about your organization.

The system enables you to unify diverse data sources and present them on comprehensive, easy-to-understand dashboards. This centralized database uses real-time data connections to ensure that information is continuously updated. Plus, it’s cloud-based, so it runs without long loading times and is easily accessed from mobile devices.

The result is a single source of truth that empowers investors to make decisions consistent with their goals and confident that they understand the big picture regarding the risks and rewards that the deal represents for them.

Ultimately, effective communication and the forging of engaged relationships with investors is the key to securing funds in a capital raise. Having the right communications tools makes it much easier to achieve that objective.

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.

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