How to Use Technology to Raise a Fund

The amount of time spent to raise a fund and perform due diligence has increasingly shortened over the last decade. 

The availability of capital has continually grown in recent years, which is one factor to shortened timelines. 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.

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.

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.

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