How to fundraise in the next normal
In the first three quarters of 2020, just 39% of funds closed in 12 months, according to a survey by Preqin. The pandemic revolutionized the way relationships are built and prolongs fundraises.
Sometimes massive change happens on a dime, even in industries prone to more traditional tactics. In response to COVID realities, the face-to-face nature of the fundraising process was forced to evolve.
The winners that emerged are the firms that embraced fundraising software and data-driven deal-making, but with a strategic approach. This means your fundraising software might be able to deliver hordes of data, but to what end?
Always ask what can I do with this information? Do I need this data? Can this information help me optimize a piece of my decision-making process? Can this information speed up my daily tasks?
Don’t be drawn in by data that doesn’t serve a purpose. The best fundraising tools will help you take the most profitable action by answering several questions.
Optimize your fundraise with these four actionable questions
Who are my top capital raisers?
Prioritize your top capital raisers and give them the most attention. Sometimes the rainmaker isn’t obvious. Using data from fundraising software can help you take any bias or preconceived notions out of your analysis.
The result could be you uncover superstar fundraisers that you might not have expected. Effective fundraising software can isolate these prime capital raisers quickly so you know where to provide support and how to cultivate even more top talent.
What regions are we most successful in?
With travel being absolutely upended in 2020, firms will undoubtedly be simplifying and reducing their travel plans. For the foreseeable future, crisscrossing time zones won’t be part of the fundraising process.
When travel is essential, define your most successful regions using data generated from your fundraising software.
In the new era, a modern fundraise approach must include the capability to filter and surface the top cities, states, and regions for capital raising.
Use your technology and tools to create an efficient travel itinerary that leaves out any non-essential stops.
Where are our best introductions coming from?
Don’t write off introductions to focus on the middle or end stages of raising capital. An introduction is still a part of the funnel and should be analyzed with as much vigor as other stages.
Your fundraising software should help you isolate which introductions lead to the most return on investment. You can uncover hot spots you didn’t expect among that data.
What are the characteristics of our most committed LPs?
The lifeblood of any fund is a base of committed LPs. To generate a solid base of LPs you need to know which characteristics to look for.
Your internal data is powerful. Looking at your current LP lineup you can see exactly what traits are leading to longevity.
Fund of funds LPs are clearly valuable. However don’t assume they are your best LPs, use your internal data to compare different LP types. Note any surprises or trends. Use those learnings to pursue more of your top-tier LPs.
Your tools and data should deliver a measurable advantage
Fundraising software and data-driven methods are not a silver bullet, but these tools can give firms a measurable advantage.
The question is, can you target the investors that have historically yielded the most success with your current tech stack? Does your toolset give you data that drives profitability?
We have much more to add to this discussion For deeper insights on our approach to a cutting edge fundraise, listen to Preferred Return Episode 1: “Own Your Edge”, as Kjael Skaalerud, SVP of Revenue at Altvia discusses what’s top of mind among PE firms shopping for technology.
Learn from our insiders how cutting-edge technology used for modern sales organizations translates perfectly to raising capital and finding investment opportunities.