The amount of time spent to raise a fund and perform due diligence has increasingly shortened over the last decade.
According to First Round Capital in an article by TechCrunch, the average time between that company’s first contact with a startup and reaching an agreement has gone from 90 days in the early 2000s to just nine days in 2020.
What has driven the dramatic shortening of the timeline?
The availability of capital has continually grown in recent years, which is one factor. The number of innovative and potentially profitable startups has increased significantly as well. And those companies have the benefit of growth incubators and widely publicized events where they unveil their offering to a large audience, forcing decision-makers to act quickly or lose the opportunity.
However, just as powerful as these drivers—and perhaps even more consequential—is the availability of new technology and new tools to streamline the process. Much of the “legwork” previously associated with raising your fund can now be handled by flexible, highly integrated systems that enable you to gather, translate, normalize, and leverage data in a fraction of the time.
This time savings is especially important to smaller teams. As Private Equity International observed in its Perspectives 2020 report, “Fund due diligence requires the greatest amount of time for over half of investors. LPs are notoriously short of time, with very small teams—sometimes just a couple of people—fielding hundreds of calls and PPMs and co-investment requests.”
Effective COMMUNICATION and RELATIONSHIP BUILDING
Technology can help you raise your fund faster is the assistance it provides in building and maintaining relationships. That starts with being able to capture the content of your interactions with organizations and individuals. Simplified tracking of notes from calls and meetings, as well as email correspondence, means you spend less time gathering information and more time acting on it.
AIM, our Private Equity CRM solution, also manages the capital-raising process right from the first contact with investors. That includes automatically generating, sharing, and tracking disclosure documents.
The system also enables you to launch tailored fundraising efforts based on previous fund data. Plus, in-depth reporting and data visualization empowers you to monitor the progress of your fundraising communications in real-time, which helps you accelerate it.
Advanced technology streamlines the maintenance of relationships by automating repetitive and time-consuming tasks like sending emails. As fast as deals are moving today, staying top-of-mind is critical. Let a competitor replace you in that spot because you didn’t have the resources to provide the appropriate nurturing and you risk being left behind.
Display Your Fund Track Record
Investors have always been eager to assess a fund manager’s track record before making a commitment. The speed with which parties come to the table today has only amplified that need. Here again, the right technology can be a game-changer.
Business intelligence tools like Altvia Answers allow you to create dashboards that compile data from disparate sources so you can make a compelling case regarding your fund track record. It is said that 80% of the world’s data is unstructured. Bringing clarity to that chaos through a tool like Answers can be critical to raising your fund in a timely manner.
This dynamically updated single source of truth retrieves data on a schedule that you define in order to ensure accuracy and allows you to answer questions quickly whenever they are posed.
Then, with a virtual data room and GP-LP engagement platform like ShareSecure, you can provide investors the information they need to do their evaluation in a way that is very convenient yet fully protected with enterprise-grade security.
Not only does the combination of business intelligence tools and a streamlined information conduit help you deliver a complete investor experience and maintain positive forward momentum, but it can also decrease the number of requests you get from LPs.
RaisE Your Fund Faster WITH TECHNOLOGY
There’s a better way to show off your track record. See how business intelligence tools can create transparency and provide LPs with the information they need to move forward confidently.
Now is the time to leverage technology to improve your operations, and the first step you is learning more about your options. Seeing Altvia in action can help bring its benefits into sharp focus. Request a demo.