How Can I Target Investors with Private Equity Fundraising Software?

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

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

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

How Firms Operated Before Private Equity Fundraising Software

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

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

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

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

Tools To Target Investors

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

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

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

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

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

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

Targeting and Timing Are Everything

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

Want to learn more? Check out the video below.

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 Salesforce.com 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 Salesforce.com 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 Salesforce.com — 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.