How to Close a Fund Quickly—Reduce Friction

 

 

 

This is the second post in our series The Stages of Investor Experience.

In our last post in this series, we covered how top-tier firms use technology to improve communications and create a better experience for investors during the fundraising stage. The next step is getting to the close.

As a GP during the closing stage, how you share, store, and sign key documents is an opportunity to provide excellent service and build a strong relationship with investors. Using technology to support all of the necessary back-and-forths when signing agreements and sharing documents can provide your firm with a competitive advantage. To build trust with your investors, this document-heavy stage must be as painless as possible.

A critical part of the job is to make the close experience as seamless as possible for your LPs. The better the experience, the more likely the deal is to close.

 

Simplify your close with the right technology

 

The close is the most dangerous stage in the fundraising cycle, according to Forbes. Broken term sheets can hurt your firm’s reputation and if your initial investors back out, you’ll be forced to start all over again.

Making it imperative to have a central system to store agreements—where everyone involved has access—you provide a secure, buttoned-up closing experience. Altvia’s ShareSecure solution, for example, allows you to store LP agreements, invite investors to sign agreements online through a secure login, and run reports to see which agreements still need signing. You can also set up notifications to remind investors to complete agreements and to let your team know when everything has been signed.

Even better, with a central system, you’ll be able to capture all of the terms of the agreements, so you can search and reference them for future communications and fundraising activities. With deal-related agreements such as Due Diligence Questionnaires (DDQs) and Private Placement Memorandum (PPMs) stored in one secure place, your firm and your investors can find the documents and information they need quickly and easily. Reducing the need to search through old email threads or an inefficient tracking system.

 

The Secret to reducing friction

 

The longer you take to close, the greater the risk to sealing the deal. Thankfully, today’s central sharing solutions have built-in features that can make the close process super smooth. Look for a solution that enables your firm to:

  • Find and share documents faster, so your team can better manage investors’ questions—and respond sooner.

  • Know for certain who’s interfacing with your agreements and other resources, and when you’re dealing with decision makers or competitors.

  • Reduce duplicative work being done by multiple people—and see who has shared which documents with investors.
  • Easily adopt compliance standards to meet increasing reporting requirements from investors and regulators.

  • Manage the process wherever you are with secure portal access across all devices, especially mobile.

Keeping everyone on course during this important s closing stage can become overwhelming. But if you use the right technology, you can streamline your firm’s processes and lead to an efficient—and successful—close and future relationship with investors.

If you’re looking for more guidance on ways to improve the investor experience, subscribe to our blog to receive our upcoming article on the topic of the third stage—Management.

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