Interactions: How Successful Private Equity Teams Organize Notes

In Private Equity, the quality of your interactions, or meeting notes with investors, is one of the most critical factors in whether they choose to invest. And because multiple individuals and teams throughout your organization will likely play a role in securing the investment, everyone must be able to quickly retrieve and review the content of any interaction or note at any time from a single source of truth.

This means that your customer relationship management (CRM) system must-have functionality for recording and managing interactions effectively. Specifically, the system should enable you to:

  • Track communications efficiently. What was communicated? From and to whom? When, why, and in what medium (email, phone call, in-person meeting, etc.)?
  • Relate or link interactions to multiple records. One interaction may be associated with or influence several contracts, deals, co-invests, fundraises, or investor records for potential limited partners. And if the investor you’re currently communicating with is linked to multiple funds or portfolio companies, you want to know.
  • Provide transparency. Often, heads of Investor Relations or Deal Teams will ask about deal sourcing or outbound call activity, even coverage across intermediaries or LPs, and interactions help you answer those questions. They are also an essential source of information in the area of compliance.
  • Manage relationships effectively. Interactions help you improve the way you nurture relationships, and ultimately raise and deploy more capital.

Without purpose-built private equity technology that includes these capabilities, you risk losing potential investors to firms that do a better job of developing a strong connection with them.

One Measure of the Importance of Interactions: 5.3 Million Entries and Climbing

At Altvia, we are, as you would expect, a data-centric company, and we track data trends very closely. One measure of the importance of interactions is that across all of the clients that use our private equity CRM, the number of interactions entered is over 5.3 million and climbing rapidly. In fact, the system’s interaction tracking capability is one of its most highly leveraged features.

6 Best Practices for Managing Interactions

When using an interactions feature, there are six best practices that we’ve identified that allow users to maximize the benefit of that functionality. They are:

1. Have all users make entries in the system. Clients will sometimes ask us if it’s better to have one administrative person or a few people tasked with recording interactions based on information provided by other users. We’ve found that that approach can create a logjam that prevents entries from being added promptly. Plus, having each user make their own entries encourages them to check out and leverage the information that’s already in the system.

2. Use descriptive subjects. It’s easy to give an interaction a one-word subject like “Meeting” or “Call.” However, it’s not particularly helpful to someone who is browsing through subject lines to have dozens or hundreds of meetings logged. Users get much more out of the system when the subjects are detailed.

3. Enter detailed notes. As with subjects, the more detailed the notes for an interaction are, the more benefit other users get from the entry. It’s a good idea to reread an entry you’ve just written as if you are someone with no knowledge of the interaction to see if you can make sense of it. Detailed notes are also important for transparency around what has taken place.

4. Develop a standard process. What types of information should be entered as interactions and at what point? For example, should every email be logged, or is it better to wait until an email conversation has run its course and log the entire thread? Reaching a consensus among stakeholders at your firm and then educating all users on the process you come up with is very helpful. See our image below for an example how your firm can create an interactions process.

5. Use the cascade feature. An interactions feature should have automation that simplifies the process of making entries. You should leverage that automation whenever you can.

6. Ensure that you are entering meaningful interactions. While you want to capture important information, recording absolutely every time you connect with an investor or other stakeholder can create unwanted “noise” in your system. Every interaction may be a candidate for entry, but then you need to focus on recording only information that will help with decision making and next steps.

Experience Interaction Management for Yourself

The best way to understand the value of the interactions feature in Altvia is to see it in action. Learn why top tier firms turn to Altvia for their private equity technology and improve the efficiency of your processes with an industry-specific platform. Request a demo today or see how firms like yours partner with Altvia.

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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