Private Equity CRM: An Essential, Purpose-Built Solution

Mowing the lawn with a “weed wacker”… It’s a scenario that many people can relate to, especially first-time homeowners who buy a small place with a parking-spot-size lawn, as some of our team members at Altvia have done through the years. The weed wacker/lawnmower analogy comes up often as we prepare to implement AIM, our private equity CRM, for fund managers.

Money is tight, and more importantly, there doesn’t seem to be any reason to invest in a lawnmower. Cutting the grass with a handheld tool works just fine. But then, you move to a home with a bigger lawn and you have a decision to make. Will you struggle to keep up with your yard work and settle for the ugly, uneven cut that is the best you can do with the weed wacker? Or will you upgrade to a machine built for mowing lawns?  

An Essential, Purpose-Built Solution

There’s certainly a time at every firm when the weed wacker version of a private equity CRM system serves its purpose and is the most affordable solution.

In that scenario, there are likely just a few people sharing data and they can keep track of fundraising and deal tracking in a spreadsheet. Meanwhile, they use their email address books to manage their contacts, at least to some degree.

But every fund manager aspires to move into that house with the bigger lawn, and the question becomes, “How do you know when the systems you use to support your operations require an upgrade?” While implementing a true private equity CRM like AIM isn’t difficult—in fact, we’ve gone to great lengths to simplify and streamline the process—it’s not as simple as buying a lawnmower, firing it up, and getting to work.

Making a Timely Move to Your Private Equity CRM Solution

Your “system” of spreadsheets, address books, and other tools that have helped you get by becomes more complicated the longer you use it. If you wait too long to get your data into a cohesive, centralized, user-friendly database, you end up with a tangled mess of information that requires a significant amount of time and effort to clean up and straighten out.

At that point, a data migration that would have been simple had you implemented a private equity CRM solution three years ago is now a much bigger project. And even though assistance from Altvia will help you tame that beast, it’s still a project that temporarily takes team members away from focusing on your business.

Launching a Private Equity CRM Solution the Right Way

Some firms decide to simply dump everyone’s information into a database and “massage” it over time. Of course, that means that initially, the firm suffers from the “junk in, junk out” principle. And let’s be honest: The massaging that you’ve planned on probably isn’t going to happen right away, if ever.

Consequently, you may find yourself limping along with really poor data quality for the foreseeable future. And, unfortunately, that means watching your competitors, with their carefully implemented private equity CRM systems, sprint ahead of and get the kind of results you can only dream of.

Are You Ready for a Private Equity CRM System?

If you’ve stopped even once to ask yourself, “Do we need a private equity CRM?” the answer is an unequivocal, “Yes!” That is if your goal is to be successful and grow your firm. (And if that’s not your goal, obviously you should be considering another line of work!)

Our industry and product experts at Altvia can get you into our AIM CRM no matter how complex your processes have become and how convoluted your data is. But you’ll save yourself a great deal of time and effort—and start winning more deals faster—if you make the move today.

The grass keeps growing. If you don’t care for it properly, someone else will. It’s time to get yourself a lawnmower.

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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.

investor relations communication