[Webinar] Future Proof Your Private Equity or Venture Capital Firm

[00:06:20] Jennifer Meyer: Sure, I am happy to, and thank you again for having me today. From a background perspective, I started my career in early-stage technology companies, primarily with SaaS-based businesses.

[00:06:30] I focused a lot on technology operations and really trying to drive whatever called good in solid outcomes for organizations really focused one on ROI, but two on business processes. When you look at what we just discussed in terms of they’re usually at cultural or need to basically meet people where they are and with what they’re comfortable with.

[00:06:51] That’s how I focus all my efforts. I joined Greenspring last year to lead their technology operations team. There are two core areas that we focus on: one traditional life to support infrastructure and cybersecurity efforts across the firm. And then the second part of the team that I built out is data and analytics.

[00:07:08] And that group is basically responsible for implementing new data processes across the organization to basically get us to scale, to provide near real-time information to our partners. So that as you mentioned, we can actually get information to them in a meaningful way. Also, speed to data is absolutely paramount for their decision-making.

[00:07:29] So I really appreciate you having me today

[00:07:33] Kjael Skaalerud: Over to you, Rich.

[00:07:36] Rich Grajewski: All right. Thank you again for having me. And I’ll put a little commercial here for Altvia. We do use them quite a bit and extensively. So I got a shout-out to our client success manager, Craig Petraglia. Yeah. He has been very integral in helping us be able to get from a good user of technology to a great user of technology.

[00:07:55] So my role at the firm is deal origination. Historically, I worked as a middle-market lender for PNC bank and had an opportunity to do work with Sharon Capitol a little over two and a half, almost three years ago. I’ve been here now. So Huron Capital, we’re an operationally-focused private equity firm located in Detroit, Michigan.

[00:08:16] We’ve been around for 22 plus years and counting, and we focus on partnering with founders on companies that have a great culture and are seeking to become a leader in their sector. We raised almost 2 billion in committed capital, across six funds. We are investing out of our current fund, which is $575 million.

[00:08:33] Throughout that time we’ve invested in over 230 companies. I actually took a look at the numbers. We had one deal close yesterday, so we’re at 235 throughout the life of the firm. We target the US and Canada for our geography. We make control investments and do companies with a CNI commercial and industrial services, professional services, and consumer services sectors.

[00:08:55] We look for companies on the lower middle market end. So anywhere between 7-20 million of EBITDA with caveats. And to make a clarifying statement, we do look at other industry sectors as well. But they’re viewed more opportunistically and we try to stick to our coordinating and where we’ve had the most success.

[00:09:12] We typically issue anywhere from 25 million to 30 million of equity on day one. And we want to put in at least 50 to 60 million per platform with, again, a caveat where we can scale up maybe a little bit higher. We can start maybe a little bit lower, which in 22 years we have done. Going back to what you pointed out earlier, Kjael is, capital is a commodity.

[00:09:30] And the private equity realm continues to get more aggressive in the VC round in the investing room as a whole just continues to be a more efficient market. So what are the attributes that are unique to Huron? And what I believe that we have is our resources that we bring our mindset and we do lean on Midwest roots. 

[00:09:49] Our core values are rooted in being humble and transparent, and that there’s no substitute for hard work. And we take that partnership approach with the management teams that we invested and we clearly live, we do not invest in the company and we invest in the people.

[00:10:05] And then how do we do that? We have a proven value creation playbook that has been built on our 22 plus years of experience and knowledge. We also try to specialize in a buy and bill approach to investing and pride ourselves in our ability to integrate acquisitions with companies. So they operate as one succinct entity, and we also have additional resources in-house that are a bit unique to a firm.

[00:10:26] Our size. We have three in-house strategy and operation team members that focus on three distinct areas. We have a partner strategic leadership that was the former CEO of Herman Miller. 15 years and 30 years, they’re a publicly-traded company. So you can imagine when you sit across the desk, a founder of a company that’s $50 million in revenue, you can bring in the firepower of somebody that they’re going to be working with.

[00:10:52] That’s a global organization, you’d be able to change that conversation or that mindset of that individual, founder, owner, or family owner. We also have a partner of performance enhancement, which was a former CEO of a technology automotive startup.

[00:11:07] They gave batteries and electronic electrification of the automotive industry. He’ll tell you that he is a recovering consultant, spend time at Deloitte KPMG and Alvarez and Marcel. And we also have a leader of capital markets and portfolio management that helps all of our fellow companies achieve the most efficient capital structure so that we can go out and invest in the companies and the most efficient and best.

[00:11:32] We also bring a vast network of relationships of executives that we bring to bolster under managed and under-invested companies, which is fairly prevalent in the kind of area of the market that we focus on, which is the lower end of the market. And we try to bring in that human capital element and bolster those types of activities and professionalize certain activities across the board.

[00:11:53] And as we have actually experienced human capital is the biggest issue that we’re having at all of our portfolio companies. And basically generally in the market, what we’re seeing, we also have one other differentiator, which is our proprietary model to investigate, which we call exact factors. And that is the executive life investment model, where we partner with the executives to develop an investment thesis and a white paper before even having a company in mind.

[00:12:19] And now we do live this. We have done this 16 times and to no surprise, those platforms continue to be the most inquisitive just based on the depth and knowledge of the sector that we obtained prior to making our first investment and six of our current 18 platforms that we have today actually originated this way.

[00:12:37] So I set a lot there. I’ll send it back to Kjael.

[00:12:42] Kjael Skaalerud: My goodness, that was some good stuff. That sounds fun. And then to appreciate the shout-out to Craig, I believe he’s watching, but that’s awesome stuff. Okay, cool. I’ll kill the video so we can actually see each other. So starting with this concept and I guess.

[00:12:56] A quick note for the audience where you are almost done with a buyer’s guide, but it’s very kind of tactical. And so it’s going to encapsulate most of the patterns. Most of the findings and the frameworks that we’ve picked up from the market over the last 18 months. We’re going to send that out in a white paper, which has some visual stuff like that.

[00:13:12] Unfortunately couldn’t quite get it done by today, but that’ll be included in the follow-up at some point. So don’t worry too much. Definitely take notes for the gold. That’s going to come from Jen and Richard’s perspective, but we’ll give you some stuff as well and follow up on this, but cool.

[00:13:24] So let’s kick it off. So in terms of frameworks and like the role technology can play in a firm and again, trying to be actionable and simpler and simple in nature. If we could perhaps start with you. I know that you mentioned that a decision point was thinking about what is the information that we need and how do we serve it up versus positioning our team to chase after it and spend their day trying to acquire the information.

[00:13:46] How do we position things perhaps via technology such that it can be served up? Perhaps we could start there as a lightweight way to think about where technology can play a role.

[00:13:55] Rich Grajewski: Okay. Yeah, absolutely. So to provide context a little bit on what I do in the BD role it is deal origination, but it’s also, supportive investment team, thesis development, being a resource for market Intel for our investment teams.

[00:14:11] The biggest thing that I pride myself on and what we do as a firm is we want to know what deals are coming to market prior to getting the teaser. If you’re getting the teaser you’re already behind specifically in this market is. We go out and we build relationships with the relevant intermediaries, executives, and what I call centers of influence in the investment community and the industry sectors that we target.

[00:14:31] I also have screening responsibilities, so I have to respond to all deals, screen the deals, and bring them in or pass on them. And then there’s a marketing aspect to educating the broader market on what our investment criteria is. So an estimation, it’s a Jack of all trades and a master of none with one caveat that you have to be a master of your CRM, because we do get a vast amount of data.

[00:14:54] So over 22 years, and in six funds, we’ve seen over 18,000 deals and that number continues to grow every. So how do you efficiently analyze by not chasing after it, but having it actually pushed? So historically we were much more of a generalist firm and it was hard to know what a Huron deal was.

[00:15:15] We went through and did some work and were able to focus on the sectors that we do, and then we had the data in place that we were able to analyze to see where have we been most successful and where it is relevant for us in the market? By doing that, we were able to actually get out of kind of an outdated Excel-based monthly reporting package that I do through our CRM historically.

[00:15:38] And we’re able to build dashboards that help us see real-time and updates daily for us. And not only that helps us analyze where we’re seeing and isolate certain areas where we need to be spending our time. So this allows for us to be much more efficient on our BD strategy. It informs us not only monthly and quarterly, on an annual basis that helps guide what we’re going to do for the future.

[00:16:01] And if we need to tweak, we can see what’s going on, day to day or week. Information is pushed us. It’s not something that we’d go in and dig in and look at. So that’s the biggest thing for us. And it starts with really spending the time to understand and spending the time with Altvia or Craig, to be able to like, say, this is where we’re at today, what are other best practices we really leaned on you guys to help us understand, what are other people doing?

[00:16:26] What have you seen? What are we missing? What are ways that we should be thinking about it, and then working together to get a defined goal of what an outcome is.

[00:16:35] Kjael Skaalerud: Love that. Yeah. Cause that’s the other tendency too in technology. We call it blank canvas syndrome where it’s okay, what should we do with technology?

[00:16:42] And you bring in perhaps like a technology consultant. It’s what do you want to do? It’s like we need some best practices. We need some shoulders to stand on. Like we need a jumpstart here. But excellent. And Jen, I know, and this is so good. So we have a gentleman who heads up growth and he has some mantras.

[00:16:56] And when you mentioned actionable outputs and delivery mechanisms, I was like, Ooh, I gotta write that one down and then spread it all around. So I guess in that vein, it sounds like you and Rich are seeing similar things. What would you add to his perspective?

[00:17:10] Jennifer Meyer: For sure. I think he’s spot on.

[00:17:11] You get out of the Excel files, Greenspring has 15 billion assets under management. And so when I came in, it’s okay, how do you manage 21 years worth of data and history in a meaningful way that everyone has high confidence in the data that’s being outputted and delivered across the firm.

[00:17:26] And really it comes down to, and I’m going to laugh when you talked about all the consultants that will come in and say, Hey, what would you like to do? And they’re like let’s do discovery for two to three months. And you’re like no, wait a second. Because at the end of the day, your firm knows best, right?

[00:17:39] And Rich knows exactly. Like I need to get this information in order to make better decisions. I have to have these data points in order to turn the dials. And at the end of the day, if you can reach that conclusion and find out what are those dials that need to be turned, you’re going to be more effective with deploying any type of strategy as it relates to technology because it’s an enabler for our people and for the decisions that we make as people and human beings.

[00:17:59] And so if you can focus on that, it’s going to help drive better outcomes across the entire firm, culturally, from an acceptance perspective. But then in addition, if you’re actually delivering again that near real-time, I always say near real-time, not real-time, because it’s not really actually true.

[00:18:21] And it’s really tough to corner that. So I would say near real-time information, you’re giving your team a better advantage, a competitive advantage across.

[00:18:30] Kjael Skaalerud: Totally. And then something that we noticed too, is the more technology, progressive groups are typically less siloed culturally, because a lot of times the deal team is on an island, IRs on an island, and finance and ops are just trying to keep everything together.

[00:18:42] And the more technology is woven in, the less there are those cultural silos. And you have to feel for the fund to funds. Cause for those that have seen inception, we always joke that you all are like three dreams deep. It’s like we’re invested in a fund, that’s invested in a fund that has a portfolio.

[00:18:56] So from a data perspective it’s geometric, it’s the challenges exponential.

[00:19:01] Jennifer Meyer: At the end of the day, the questions that you get from your LPs, your GPs are okay, ‘so what’s this indirect that you’re invested in, how’s it doing?’ And what’s a performance where they hear, they get that tear sheet and they’re like, wait a second.

[00:19:09] I didn’t know this was going on, or that we invested in it. And you want to be able to answer that meaningfully, but also very quickly, to give them that information. And the reality is at our firm I’m lucky. We work very collaboratively and we work across your organization. There’s not that siloed approach in terms of how we attack these efforts.

[00:19:26] At the end of the day, everyone’s focused on providing the best outcomes for our LPs, our GPS, and really delivering for the actual companies that we invest in.

[00:19:35] Kjael Skaalerud: Totally. And so to change gears a little bit and just considering what information is useful and how do you serve it up.

[00:19:41] And there’s also the kind of this notion like data entry and like big data, right? The tendency was to go out and hoard data and then all of a sudden people are swimming in it and there’s no sense of priority or there’s no sense of meaningfulness if that’s a word. So the tendency is, firstly, we need to the carrot or the stick, is the data entry in the organization, and the upfront lift to get to a place.

[00:19:59] And the carrot at the end is the visibility and kind of the ease of access. That’s on the other side. So Jen, to kind of change gears a little bit, but still under this notion of frameworks and then we’ll change gears. This concept too is if you have kind of data as one bucket and what’s the most useful information and how do we make decisions quickly that give us speed right?

[00:20:18] To the right deals or make sure that we’re front of mind with bankers, or we can be responsive to LPs so that we don’t come off. Like they’re calling coned waiting for an energy bill update, right? This notion of looking at workflow and tasks, because there’s also, and not to get too abstract, but this the sense of we want our employees doing meaningful, fulfilling work and creative work.

[00:20:38] And so this analysis around what are the repetitive manual tasks and how do we take them off the place that they can focus on more high value, high impact, high meaning work. So what’s your take?

[00:20:48] Jennifer Meyer: Yeah, I love it. You’re using my high-value work. That’s exactly right. It comes down to, when you look at this, I am a big fan.

[00:20:58] This is one of my favorite things. People see chaos and I’m like, okay, wait a second. Let’s look at this chaos for a minute and unpack it. And that’s where you go from the strategic down to the tactical and back up again. And if you can do that kind of across the firm, you’re going to identify those issues and challenges that are really the impediments to data delivery.

[00:21:15] Because you’re going to find out that someone spends, two to four hours of their day inputting, whatever report it might be or whatever, an outcome that might be required in order for the partners to make a good decision. So what are the things that you can do to basically reduce that time to ingest the data?

[00:21:31] And then move that forward across the firm. So you do that in what I call small clips. So what I would do is I would basically do discomfort projects internally to test the efficacy. Does it work right? Are we actually getting traction with building less time to delivery? And if we are, what does that mean from a return on investment?

[00:21:50] Can I move those folks who are doing that data entry, which by the way, is an incredibly important task because it can be fat-fingered, it can be incorrect. And all those things have downstream impacts that are not good for our organization. So the reality is if I can get that person focused on more high-value outputs. And Rich, I bet you.

[00:22:08] If you’re looking at this there are so many questions you would rather ask, right? Or like to know the answer to. So it’s finding out what are those one to two to three things that will really help turn that dial. And then you really focus on that. And then you give those people what I call more high-value outcomes, which again, provides better job satisfaction across the board.

[00:22:25] It provides them more what I would call engagement within the organization with what they’re joining. They’re not just a data entry person at that point. They’re really looking at things from a business context and being able to relay that I think is critically important.

[00:22:38] Rich Grajewski: I’ll add to that too.

[00:22:40] And this is not my, I say I stole from my father-in-law, so I have to do a props to that. But so there’s some of the effective effectiveness of a process evaluate how well it handles exceptions process works well with all the variables and everything are working properly. Like it’s designed to do that, but it’s not designed to handle obsession.

[00:22:59] So that’s how we think about our mindset is how well does it handle. How well, can we isolate variables that are the determining factor that will make us more competitive or know that we need to be looking at this deal versus that deal? We frame it in our heads.

[00:23:18] Kjael Skaalerud: Father-in-law sounds like a sharp individual. I’m going to borrow that one. And in that vein too. So obviously, I was totally tickled, following our conversations. I was like, wow, there’s so much exciting stuff that you all are thinking about and working on, but something that definitely stood out to me, Rich, the majority of firms that we talk to, they wouldn’t know how many deals have you looked at over the lifetime of the firm.

[00:23:39] They would have no idea. Or what were the conversion rates of certain deals or, let’s talk about your coverage model. Who’s giving you the most deals. Okay. But let’s actually talk about the outcomes that you’re trying to get to. Who’s getting you the deals that convert and generate the best returns for the fund, right?

[00:23:52] So those types of questions. And so this notion of analysis over time becomes available. And so how has your camp thought about, extracting insight from data, especially as you get the benefit of time?

[00:24:05] Rich Grajewski: So we, I would say historically, we were good at doing this stuff. It was always a function that we always really lean heavily on in the business development function to extract insights into where should we spend our time.

[00:24:17] I think we’re on the path to being great and hopefully with the real, tangible opportunity to be a market leader in this. So what we’ve done is basically created these automated dashboards along with, Altvia’s help, and we can isolate certain variables. Like early looks is a big one for us.

[00:24:34] So not only can we just see it, by year, but we also slice and dice it by the intermediary, by sector, by geography, by which executives do we have on that team? Who did we talk to? Who do we look to buy any type of service providers that we worked with? So we can see the whole of deal of environment of who worked on that deal with us, or what did we look at and why are we successful.

[00:24:57] And being able to pull out, specific reasons why. A lot of times it comes down to just time. We had more time to be able to do it. We knew that deal was coming to market three weeks or four weeks ahead of everyone else. We were able to position ourselves to be the buyer of choice and thinking of it from an investment banker’s perspective, from an intermediary, they have, an actual fiduciary responsibility to clear the market price, right?

[00:25:19] That’s what they signed up for. They’re incentivized to do that, but they also have to be able to have a clear reason to close with a certain part of exclusivity to one person versus another. So you need to demonstrate that type of knowledge. And so what we needed to do is figure out who is selling us the best deals who showing us the most relevant deals and where are they?

[00:25:40] We have a funnel tracker from the time we receive it to the time we can close and get five different metrics that we know what’s our yields through that. And what’s our yield through. And by doing that, we were able to isolate where we needed to be spending our time and defining what those sectors are and why we’re relevant and why we have demonstrated now.

[00:25:57] Kjael Skaalerud: Yeah, totally. Cause then that’s a difference between what’s your sweet spot. It’s oh, technology companies with between five and $15 million in revenue and a clear line of sight to cashflow positive. It’s like that’s most of them. Yeah. So you got to dig, two or three, but then when you talk to somebody who’s data-driven to your point, it’s like, we’re talking to groups that have a growth rate of this with an acquisition cost of this and a concentration of the competitive set that looks like this, and there’s complimentary tech and it’s just a very different conversation.

[00:26:23] Cool. All right. Let’s switch gears here a little bit and we’ll talk about tech maturity and zooming out to something very abstract at Jen. I loved your commentary around, as we think we zoom out, and this is the cliche about privates is there’s a ton of resistance to attack.

[00:26:39] And that there’s a resistance to change because they can’t really grasp the perceived value because there’s some lift to get there. So you got to move apartments and most folks have never stepped into the new apartment. So they can’t really believe that it’s going to be that much better than the apartment you’re at is not that bad.

[00:26:53] So you talk about isolating a key or bite-size win, and then knocking it down and then building momentum within the firm that way, and getting more kind of buying the technology consultant problems. So can you give an example of that or give us a sense of how you think about it more and more.

[00:27:09] Jennifer Meyer: Yeah. I’ll comment on what Rich was talking about when you have an automated dashboard.

[00:27:15] So we’ve taken that a step further. When we look at that one, there are two things that help this one. You have to have a culture that’s open to at least a little bit of change. There has to be a bit of an appetite for that, knowing that there’s got to be something that basically is moving forward from the market perspective or from a competitive advantage perspective that will help you.

[00:27:33] So you have to have that, and people can see that they have it. It doesn’t necessarily mean that’s actually true in practice. So you need to figure that out pretty quickly and understand whether that’s actually something you can move forward. The second thing, you have to identify champions. There are going to be people within pockets, and this does not have anything to do with title.

[00:27:50] It has to do with who does the work, if they know that they can make their work and their day easier, they are automatically going to be more in tune with wanting to move something like this forward. So for us, we basically did. We were a Microsoft shop. So basically everything we do is through power BI.

[00:28:06] So as we’re pushing these out, we do some other things like such as if we know that one of our partners is going to be coming out to market and raising. We want to know when that timing will be. So there are triggers that are automatically set up so that the team doesn’t have to basically go back and look through their notes and guess on the timing.

[00:28:22] So we have taken anything that we think is low-value work, and I don’t want to call it low-value work cause it’s actually really important work, but it’s more what I call, not high brain function requirement, right? It’s stuff that we can just put it in one time, set it and forget it. And it automatically lets them know that they need to follow up on that.

[00:28:40] If we’re talking to a company from a direct perspective, then we know that they’re going to be out raising again at X time, we want to be able to look at that. We also want to be able to go, okay, we also need you to do a check on what’s the growth of employee count? What are the things? So anything like that, that we can do from an automated perspective, that’s how we approach and tackle that stuff.

[00:28:57] We look at it from, okay, let’s take them out of those again, low value-added efforts, but that really can move things forward from the perspective of, okay, where do we want to spend our time and where should we be focused?

[00:29:08] Kjael Skaalerud: Got it. Yeah. Or another concept too. It was like this notion of cognitive load, right?

[00:29:14] Like we don’t want our team worried about did I brush my teeth this morning? Or, when was I supposed to clean my room? What am I picking kids up from school? It’s like automate that and let those reminders come to you, so that you can get into the work that’s more creative and deeper focused.

[00:29:28] Jennifer Meyer: That’s actually a really good point because also in the current environment, we’re in with the hybrid approach to how everyone is working right now, you almost have to do that because it is a different cognitive load. And there’s a lot of outside factors that are impacting people every day. You’re going to hear me talk about this every time.

[00:29:42] Like everything you do, whether it’s data, technology process, it’s all centered around people. So you have to be able to basically map the efforts that you’re doing to basically meet those needs of where they are at that time. And so I think that actually is a really great point.

[00:29:55] Kjael Skaalerud: Cool. And Rich, I loved our conversation about this notion of there’s tasks that need to get done.

[00:30:02] And, for instance, if you have relationships with intermediaries, right? It’s okay, I have a list of a hundred bankers and I’m going to call a hundred bankers every week. And you’re executing the activities, but there’s no sense of priority. So there’s no leverage with your time.

[00:30:16] You’re basically putting one unit of energy into each thing and expecting something back versus knowing that if you put one unit and you might get two or three back, and that’s where leverage happens and that’s where you get, speed and timed outcomes and things like that. So can you give us a sense of how you’ve introduced priority in your interactions with intermediaries or other areas in the firm where you work, maybe considering alright, we know this activity needs to get done.

[00:30:36] We know it’s a key element of our edge. How do we make sure we’re spending our time on the high value, high probability, however you want to define it activity.

[00:30:43] Rich Grajewski: Yeah. So the way that I prioritize everything is capital deployment opportunities come first. So reviewing platform opportunities, always going to be the number one thing that I do.

[00:30:53] And then the next opportunity is getting out in front of those deals. So knowing what’s coming to market and then you need to house all that information, right? You need to be able to have it easily accessible and somewhere that you can pull it up immediately when you need to. So one of the biggest challenges that we’ve had is technology adoption and being able to house all of our information in one place, instead of somebody putting it down on a piece of paper and having their notebook.

[00:31:18] And that’s how they’ve been doing it for 20 years. So one thing that we do is we help with interactions with intermediaries. We’re able to actually just keep all that in our CRM by being able to basically create an email, do the type of interaction and that intermediary or that person’s name, we send it to this automated email address and it gets logged into our CRM and it’s there and it’s there forever.

[00:31:40] And we can search by date. We can search by name. We can search by keyword function. It’s all there. And it’s all tagged time date with who did it, who was on the call, what was discussed. So that’s the biggest thing for me is prioritizing who you need to talk to. So developing our call, lesson, our calling strategy, and then creating a cadence around that, but also having to be responsive to deals as well.

[00:32:03] So it’s always a fine balance between those two. But I always typically lean towards capital deployment opportunities first and then intermediary interactions would be the next on the list. And then there’s a myriad of other support functions that comes with that with being able to do thesis development, marketing communications.

[00:32:22] So on and so forth.

[00:32:25] Kjael Skaalerud: Totally. And to recap too, just in the simplest sense for the audience here, right? So it’s using the information to assign a sense of priority. So whether it’s, the best quality deals are coming in, we’ll just stick to the coverage model conversation, right?

[00:32:38] Like we understand that our best opportunities are coming from this cohort of individuals. They are then prioritized as tier one. And then what are the rhythms and what is the cadence that we assigned to tier ones so that we stay front of mind. And then that kind of works downstream into tier twos and tier threes.

[00:32:53] And you can use technology to do all that.

[00:32:56] Rich Grajewski: Exactly. So we’ve assigned a tiering system, not to say that intermediaries, whether you’re in a tier one or a tier three, you’re not important. It’s just, there’s relevance associated with it. And there’s also a volume associated with the too Hey Lincoln, for example, does 500 plus deals.

[00:33:13] Versus a boutique shop that has five people that will be, might do six to 10 deals a year. And they’re certainly relevant. There’s just not going to be that same level of, volume and activity where you need to talk to them on a monthly or weekly basis. So that’s how we’ve sliced and diced and tiered it.

[00:33:35] Kjael Skaalerud: Awesome. Ok, I’m just checking on the agenda here. So one last thing on, kind of the framework to that really stood out to me. Jen is this notion of timelines because I think the tendency is, as my mom tells me, reminds me all the time.

[00:33:50] If you want to eat now, Eat one bite at a time. And so a lot of that is, is being able to understand what’s going to be a good bite at first. Like where’s the low-hanging fruit and then assigning a timeline and an action plan. They progress over time. So how do you think about assigning time periods to objectives that have a technology undertone?

[00:34:09] Jennifer Meyer: Yeah, look it blows down to pretty, I would say basic concepts, but, it really comes down to one. What’s it going to take from a technology left perspective to what’s it going to take from a training perspective for folks to actually be trained and understand it and be able to utilize it?

[00:34:23] And then three, what is it going to take from a full delivery? Cause you can do like a beta test of some effort, whatever it might be, that could be your bite-sized chunk and get what I would call prebiotic. To the actual delivery of the full suite of services, an example for us like real-life data.

[00:34:40] When we started, our effort is looking at, okay, we’re not going to put in every single friend direct in secondary in our first SWAT. When we jumped into the deep end, we take the data and we basically say, okay, we’re going to take one. We’re going to take wonder act. And we’re going to look at that result.

[00:34:55] And we’re going to understand what that is. And we’re actually going to take ones that are more complex. Because it can show the efficacy of the product and what it will show from a reach perspective. When a partner gets these reports directly to their inbox. And so from our side, that’s really the best way we feel to accomplish it, but also to get early buy in because no matter what, large technology undertaking that you’re working through, there’s always the trough of disillusionment.

[00:35:19] It always happens. You’re like, a few months into setting something. I’ll be, you guys notice you’ve worked with us for how long, how many different iterations have we gone through updating, changing, moving things around, making sure that it really makes sense for our business. We’re literally about to undertake another one with you, like I think in the next week or so.

[00:35:37] And so the reality is you’re always looking at, from the perspective of how am I going to provide the most value internally that again, then relates out to external value. So that’s the way I look at things when I’m basically mapping out timelines from the perspective of the teams, but you also have to have a high level of accountability.

[00:35:54] And that’s a tough, that’s a tough one for a lot of folks, but if you’ve got everybody on the same page and you’ve all said, okay, this is our plan. This is what we’re moving forward on. Being very, what I recall focused with your communications, making sure that they’re frequent, and that things stay top of mind, and that you give people a chance to provide feedback regularly and not on an as-needed basis.

[00:36:13] And you also have to map that with who are my best users for each of the different resources that we’re basically creating because it’s not going to be the same across the board. I might have something that’s very tailored to our investment team. Whereas I may have something else that’s really tailored to my business intelligence team, vice versa.

[00:36:29] They’re all going to be different. So really focus on that audience and their needs.

[00:36:34] Kjael Skaalerud: Love it. And just a quick reminder for those that are new to Crowdcast, which is the tool we’re gonna be using to host these. In the bottom, you should see a few options and one should be ‘ask a question’.

[00:36:46] So if you have a question, we don’t want you to wait just drop it in there, and then we’ll organize them and do our best to prioritize. And we’ll spend the last 10 minutes trying to rock through those.

[00:37:02] All right, so let’s change gears here. The trough of disillusionment. That’s a good one. All right on. So let’s talk a little bit about that and then probably move through it pretty quickly. And then just get to a piece of very kind of pointed, condensed, actionable advice for the crew that’s with us here.

[00:37:19] But on the topic of hurdles something that really stood out to me, Rich, was this notion of it’s like the tendency to fixate on what should we automate? Versus what’s our strategy and how do we execute our strategy? So can you talk a little bit about perhaps not getting caught in the weeds around, let’s automate everything and associating a technology initiative, just like any other, like a hiring initiative or anything right?

[00:37:42] That’s associated with strategy and execution. Can you give us a little sense there?

[00:37:46] Rich Grajewski: We have, keep it simple stupid, you can’t automate everything. There’s going to be certain tasks that just have to be done in Excel. But where are the ways that you can have as, as you mentioned, high impact.

[00:37:58] And these are I wouldn’t say low value add, they need to be done, but they’re time-consuming and there are areas where you can’t factor. There are areas where there could be human error being put in there. So as we looked at our processes, we went through and defined a kind of a scope of where we are spending a lot of our time and where these processes can be outsourced or automated.

[00:38:18] So being able to do that and actually leaning on Craig, and Altvia, I’m trying to get best practices and where there’s functionality that we’re not taking advantage of. Where are there plugins? There’s a thousand different apps and plugins out there. Excel connector is one that we used religiously until three years ago.

[00:38:38] There’s PitchBook plugins. There’s tons of other ways to automate the ability to input context, input, data, input deals, input interactions. Whereas historically we were going into our CRM and actually typing. So we were very prescriptive when we isolated where our pain points were, and then we relied on Altvia to be able to say, what are the best ways?

[00:39:01] And honestly, there’s not going to be a solution for every single thing. There always are going to be limitations and that’s understood and that’s fine. But I think we really assigned a value, like a tangible number value to it, like impacts and then time. And then we prioritize the ones with the largest number to be able to achieve the low, the most impactful results.

[00:39:22] And time-saving. So I made a couple of examples of things I already mentioned, interactions, housing notes, logging deals and then having that information pushed to us. So one thing that we have is an active pipeline, which we’ve been doing for years, but now it pushes us. Hey, this deal is coming up for IOI.

[00:39:39] Where are we at with that? We need to be able to get, how many calls have we had? How many banker calls, how many sector calls, industry calls, where are we at? And how’s all that? So it gives us some information. So we know we don’t fall behind and it keeps us accountable.

[00:39:53] And accountability is another thing that I know Jen mentioned a couple of times too. That’s a big thing for us too, is keeping us all accountable because we all have 10 other things that we need to do.

[00:40:03] Kjael Skaalerud: Yeah. Awesome. Yeah. I look at time and impact. Jen, please. 

[00:40:08] Jennifer Meyer: Do you mind if I add something because I totally agree.

[00:40:10] And it’s absolutely true because there are some things that are just so important to leave with the human factor. The reality is that both we’re trying to have, like very, I know that I’ll be a team of super talented, but we also have very talented teams and very talented team members who are incredibly seasoned and they have these incredible relationships across the board.

[00:40:29] And if we lose that information that they’re able to gain through the relationships that they’ve cultivated or a time that is a huge mess, it helps us to move forward faster. And it gives you that maybe that Intel that is not yet public and which is really tough for us because we obviously play a lot in the private markets.

[00:40:45] So trying to get that information early, soon, fast, and how quickly can we get it into the CRM? So exactly you can get it in the pipeline. You can get people moving on it. And that is how we get to the speed of getting that information out into the right people at the right time. And I don’t want to diminish that at all because technology is a great tool, but it is a tool, right?

[00:41:05] The people are really like the secret sauce of what makes things move.

[00:41:10] Rich Grajewski: Another example of that too, is when we look at a new deal we need to be able to see all the other deals we’ve ever looked at that are like the tracks there. Might’ve been attributes in this deal that are better than others.

[00:41:22] Why is that? How are we housing that? So that’s the other thing too, is how quickly can you access that? And you don’t have to go to five different places to get it. We had our SharePoint. We had this, we had that, but now we’ve all basically migrated to just one spot.

[00:41:38] So somebody would always lean on BD to be able to go, Hey, what was that deal? It was around this time frame from here. And here’s the link to go get it. And that’s another thing I’m doing for the day. As I’m teaching them this is how you find it. You can lead a horse to water, but you can’t make a drink.

[00:41:56] So I lead everyone to water, basically telling them like, this is how you find it. This is how you do it. It’s up to you now to be able to do that, know them, create accountability around

[00:42:04] Kjael Skaalerud: Totally. And just concept wise too, for sorry for the audience, like some things that were spoken about just then, right?

[00:42:11] Like this notion of a. Like data entry. A lot of the best way to solve that is to meet people where most of the work activity already happens like the inbox. So if they can’t take quick activities and let the inbox do the heavy lifting of capturing records if you’re researching like a company summary, and keying that into the CRM, those are available publicly, right? That’s almost table stakes knowledge. So this notion of data enrichment, so the vast majority of the market is subscribed to PitchBook, Preqin, Crunchbase, Cap IQ, whatever the case may be, how do we take that? And the delivery mechanism, right?

[00:42:44] How do we pipe that into the system of action, where our info is already living to preempt those assets. And again, moving away from kind of manual table-stakes activities towards stuff that can give you an edge. Excellent. One last topic on this piece. And this is a weird question, Jen, so I apologize.

[00:43:02] I’m not sure you’ll have an answer, but in terms of communicating, the status quo and there’s a lot of zoom out, like the demographics are changing, right? And there’s a much more kind of tech savvy kind of cohort that’s coming in and making decisions and doing things. And they just assume that life is going to be the way that it is on their iPhone and they’ll have access to real-time information and things like that.

[00:43:21] But in terms of how you try to get buy-in on the lift to realize an imaginary pixie dust gain that has not been yet observed, do you have any thoughts for that?

[00:43:32] Jennifer Meyer: I can just give you my real world example. When I basically came into Greenspring one of the first things I had Ashton and Jim were our founders, and co-managing general managing partners.

[00:43:42] They believe in being able to show information and data when they’re meeting with folks directly. And so the lift that I had was probably less than maybe some others would have encountered because I had two folks who are leading the charge and the direction and the guidance of the organization across the board.

[00:44:02] On top of it, the entire team is behind us. I think even anybody who might’ve been a bit hesitant, sees the value in us being able to have those real-time data feeds and being able to pipe that data automatically. I am a big proponent in anything that we can automate where appropriate, like if it’s the PitchBook API, Preqin, Cap IQ, data feed, or Snowflake, whatever it might be, do that, but make sure that the information is relevant and gives that stuff right up front.

[00:44:29] So from our side, it was, I would say, and probably an easier lift than it might be in other organizations.

[00:44:34] Kjael Skaalerud: So I know you think that kind of comes back to show quick wins that don’t require a ton of lift or a ton of buy-in to at least show them the kitchen in the apartment.

[00:44:42] Jennifer Meyer: Oh yeah. Again, super supportive.

[00:44:44] When we went through this, the key thing with our MVP for the data lake was that we needed to be able to show actual direct, actionable output. And if I can show actionable output, this is what this will look like when it is in your hands, that is tangible. They can give feedback. It seems real.

[00:45:01] And they understand what is actually going to come in the future. And that matters at the end of the day. When you have a project that usually takes anywhere from 10, 12, 24 months to deploy that’s. Ask any organization, because that’s where the fatigue comes in.

[00:45:18] It’s a long time and it’s a really tough road to go down, and Rich, it sounds like you’ve done the same thing, when you’re taking 20 plus years of history to get that data transformed in a meaningful way so that people can actually utilize it. And again, they have that confidence in it.

[00:45:35] That’s the magic. It’s a heavy lift. It’s not pretty, but it matters. It matters tremendously, but we had an advantage because we were already fully baked with LVF. So we have good data. There are teams that have already been involved in it. So there were some key advantages that I think I had walking in here that made this more palatable across the organization.

[00:45:54] But I think overall, our outcomes as well will be really meaningful for the longer term.

[00:46:01] Kjael Skaalerud: Totally. Yeah. And there’s this notion too, of, as you mentioned, if there’re cultural buy-in groups for jazz, especially at the executive level, that’s half the battle, right?

[00:46:12] Because it’s hot, the top-down thing kind of permeates. And another thing that we hear a lot is that there’s a lack of feedback loops when it comes to a technology champion, like they’ll do what they’re doing in isolation versus pulling people in just simple one question surveys, like what’s the worst part of your day?

[00:46:28] And just, and getting them to co-create the initiative together and just first fixating on the painful areas. And then just letting them know that there’s a better way. And then once you step into the better way you keep the feedback loop going, so you just iterate your way to the promise land.

[00:46:42] Cool. So we’ve got 10 minutes left here. So I would ask you just in terms of, if you had one piece of advice, on the topic of future-proofing your firm or thinking about technology implementing technology, what would be your piece of advice for them?

[00:47:03] How do you boil 50 minutes down in one sentence? How about that?

[00:47:07] Rich Grajewski: Make sure you understand your data. Like first off you have to be able to be captured and have it in one usable place and then have a good partner to be able to help you understand and be prescriptive. You can’t just come in.

[00:47:20] As you said, with a blank canvas you need to have an idea of all right, we’re here today. This is where we want to be. I don’t know how to do the middle part. So help me understand where we can get through to the end goals and you need to be very prescriptive. And I think Craig would probably say I was maybe a bit too prescriptive.

[00:47:38] We had a living, breathing document, literally down to go to this field, this object, this stuff which got bigger and bigger as we continued to work on the project. But be prescriptive and have clear definable goals in mind that meet the strategy. And if the strategy changes, that’s fine.

[00:47:55] But you need to help have the data inform the strategy, not manipulate the data to fit.

[00:48:02] Kjael Skaalerud: Yeah, that’s something that you mentioned too. That’s outstanding to me is like firstly, getting a handle on the technology usage today. I think you did a quick analysis in the early days.

[00:48:10] And it was like, all right, 90% of our usage just anchored around three human beings. So how do we remove the kind of bottleneck of a champion? Because inevitably it’s Hey, how do you do that thing? So they become a bottleneck, almost a magnet when there is an issue. So how do you spread adoption more broadly and again, position people and serve them up things that coach them on how to get that stuff on their own so that you remove those bottlenecks over time kind of subliminally.

[00:48:35] So that’s very good. Over to you, Jen.

[00:48:38] Jennifer Meyer: I agree with everything Rich said, and one hundred percent would follow the exact same path on that. The second thing that I would add to this is really that technology should not be something that is seen as a hurdle. And when you go to bring somebody in either internally or you’re working with an external vendor, they should be a partner in your process.

[00:48:58] And when you look at that, what that means is when someone’s explaining something to you, are they spending the time to actually go through what the acronym soup is because when we talk about APIs, when we talk about all these different pieces that people are not necessarily familiar with, that doesn’t mean anything.

[00:49:12] It’s just a different language that needs to be understood. And so you almost need a teacher, someone who is willing to teach, and then train, and that’s again going back to what you said about, how do you get rid of just the bottleneck of the one champion? How do you build that entire group?

[00:49:27] So I found the one person, but who are the other people that work with them that also need to get that same information, same data. And you’re going to find everyone has a different level of comfort with that. And as again, meeting that need, so we provide training in multiple different ways. So it could be online.

[00:49:42] It could be in-person, it could be whether we’re doing a zoom, whatever it might be, it could be through written materials. You talked about your 10 page doc, like just making sure that there’s user guides, because the accountants that I work with, they would love to look at it. They want to be able to see that.

[00:49:55] And they want to be able to reference it back and be able to go through that because they are very specific. They want to know the details that might not fly for everyone else across the organization. And so it’s making sure that you have the materials that support that effort and really help with this across as okay, this is what we’re doing as an organization.

[00:50:12] It’s not just one little siloed area or person that is going to be responsible.

[00:50:15] Kjael Skaalerud: And the concept that I’m totally fascinated by. And there’s a lot of thought, but that all companies are tech companies. Some just don’t know it yet. We’re like, if you do it right the thing and document the thing.

[00:50:27] And it’s Hey, where’s your playbook? It’s between my ears. It’s okay we’re about to onboard a new class of investment associates. Good luck articulating the playbook to them where right. Where Rich might say, here we go. These are our highest converting deals. Here are the attributes that are most associated with them.

[00:50:41] This is what the conversion times should look like for deals, and it’s just a whole different conversation. And if anybody turns over, it’s all good. It’s defined in the system right now. That was a big realization for me. It’s with compliance in particular, it’s what should we do about compliance?

[00:50:54] And it’s compliance should be a by-product of the machine that you’re living and breathing in. And that was a paradigm shift for me. Cool. So I think we’ve got some questions here. Let me get eyes on these real quickly. 

[00:51:10] So we touched on this a little bit or actually, in terms of how you all kind of track and report on the performance of a company or fund manager. What does that kind of process mean? I guess we’re going into portfolio monitoring here a little bit. But what is perhaps some advice there when it comes from a data perspective, from a tech perspective when it comes to portfolio monitoring?

[00:51:38] Rich Grajewski: Yeah. I’m not on the portfolio monitoring side. I know that we still use Excel, but we also have an entire team of four people that works with a power BI type intelligence to create monthly reporting packages, quarterly and annual reviews. But that’s the extent of my knowledge that I can actually bring to bear.

[00:51:56] So I will lean on you, Jen.

[00:51:57] Jennifer Meyer: Yeah, sure. And look, I’m also not in portfolio monitoring. I just happened to work with them for the efforts that we do, but the reality is it’s a combo effort, right? We take information that’s built into our CRM and all the outright, basically walking through that. She’d take that as a baseline of, okay, what are we looking at?

[00:52:14] And what’s the baseline data that we need? So we have specific parameters that we look at from that perspective that have to be completed. Whenever there are calls done. If we see news articles of things that we’re tracking, if additional information has been shared with us from GPs and LPs, all that gets tracked.

[00:52:30] We also do what we call weekly and daily roundups of information that we’re tracking as well to basically provide additional information across the firm. And that goes to distribution emails that we have within the organization. And then in addition to that, any additional information that we can pull on, whether it is it’s all those same things, the PitchBook to Preqin, the Cap IQ, any data feeds that we feel are relevant or helpful across the board, that’s basically put together and packaging and we call them like scoops and baseballs that basically come together to basically show us what’s going on with any company, any fund that we’re looking at or working with has something changed with one that we’re currently engaged with.

[00:53:08] And so far it’s a pretty robust practice. And our team does absolutely remarkable job of moving that stuff forward across the board to have what I call, a point in view at any time, for any organization that we’re looking at,

[00:53:23] Kjael Skaalerud: I can add some context there too, because this speaks a lot to how we’ve structured the platform.

[00:53:28] But if done correctly, right? Most of the contextual information, the interactions, the data that’s harvested over time, the table stakes information is housed in the CRM. And then from a data perspective, the missing links are fund accounting and then portfolio level performance and fund accounting.

[00:53:41] And we don’t play in accounting whatsoever. And it’s our view that it’s almost impossible to execute on it, our accounting and a CRM centric kind of platform under the same umbrella. So let the fund admins let the accounts, accounting software absolutely execute at an elite level where it just can’t go wrong, but there’s no kind of implied upside.

[00:53:57] Whereas fundraising, if you fundraise better, if you do bit deals better, there’s huge upside, right? So we pipe in the fund accounting and then from a portfolio perspective, Most of the challenge and it depends a lot on your investment strategy. So if you’re a buyout shop, the CFOs tend to be very responsive.

[00:54:10] If you’re taking a minority stake, the CFOs, maybe not so much. So there’s three parts to it, right? You have collecting the data, you have consolidating it and normalizing it, and then you have serving it up. And that’s where analytics and data visualizations can speed up comprehension. And on the actual collection side, very basic, you can send out just automated forms, quarterly and the frequency isn’t too crazy.

[00:54:30] So here’s a quarterly note, time to a key in these 10 KPIs drop in an attachment of your P and L and away we go and then consolidate. But the challenge is there. And just for the audience is the more, if you’re investing purely in a SaaS company, And you track 10 KPIs that are operational or performance centric and maybe four or five that are ESG, which is increasingly relevant.

[00:54:48] If you’re not tracking that stuff, I would encourage you to think about just one KPI, like maybe it’s carbon impact. Maybe it’s the diversity score at the executive level, whatever the case may be. But the more variance there is in your strategy and the companies you’re investing in, the more variance there is in the KPIs that you’re tracking.

[00:55:03] And so that normalizing element becomes more challenging. But once you have a normalized visualizing, it is easy pre-built dashboards. Here you go. Here’s firmographic, let’s slice and dice the portfolio and away we go. And then you can consume that stuff internally in the CRM to be smarter for making investment decisions, fundraising decisions, but the most important thing, or I think where we’re seeing the market move the most is serving that stuff up to help.

[00:55:24] Because if I’m an LP and I want to know how my 401k is going, I pull out my phone and I look at the value changes and the intraday rates versus a lot of scenarios and private equity. I’m getting like a printed PDF every quarter. That’s a quarter in arrears. So if you can bring a more modern digital experience, the LPs, they get really jazzed about it because it builds transparency and trust and all that other stuff.

[00:55:44] Okay. It is time. Dagnabbit, I thought we could maybe sneak one more, one more question in there. There was a question on collaboration, like tactics for encouraging collaboration between the investment and the fundraising side. So perhaps I’ll throw a note in some of the follow-ups and then tactics for encouraging colleagues to use technology to streamline their stuff.

[00:56:05] I think we touched on that pretty substantively. So thank you all. There’s no one around to clap. I’ll clap. Jen and Rich, you both absolutely rock. This is totally awesome. And follow up, I’ll put together a piece to address that question.

[00:56:21] And then we also have that buyer’s guide but it’s more kind of a guide for technology adoption over time and how to think about it. We’ll socialize that and hopefully that’s useful. And then we’ll send a quick survey. So we are committed to be better every day, better every session. Please your feedback means the absolute world to us.

[00:56:36] We’ll get a quick survey out, let us know what we can be doing better or let us know what you enjoyed and if you’d come back, and we’ll see you next time. Thank you. Cheers. Have a good day.