Recession? Inflation? Higher Interest Rates? 5 Things every Private Capital Firm should be doing right now.
With so much talk about recession, rising inflation, increasing interest rates its natural to ask what your firm should be doing to navigate these potential challenges. Here are 5 things you can do right now, and have in place in weeks/months for your Private Equity or Venture Capital Firm.
Digitize your end-to-end journey. This is not 1990, it’s time to get out of excel, and offline processes, and onto the web, with entirely online processes. With millennials now in their 40’s, the expectation of ‘online, all the time’ is now table stakes, not progressive. Work with companies like Asset Class to get your end-to-end ‘Investor Lifecycle Management’ solution in place. It’s faster, cheaper and its what your LP’s want.
Deploy eSignature. This is an instant win, with over 80% of subscription agreements being signed same day. Don’t just take your offline form, and move it online though, make sure you cut down on admin errors by having your onboarding, CRM, compliance management system AND your eSignature systems talk to each other. Why? Because when your LP receives the document, you can have it fully completed, accurately mapped and ready for signature. No delays for the LP – they can just review and sign, helping you to raise capital – faster.
Buy-don’t build. A lot of PE and VC companies think – how hard can it be to buy a generic CRM system, build exactly what we want and then go deploy it. The answer – VERY HARD. You are not a software development company, you are not a software support company, you don’t have visibility of the world of best practice, you do not have millions to spend on evolving the platform from version 1, to 2, to 3 and beyond. What makes you think that you can out-develop dedicated software companies who spend millions each year in research & development? You are financial experts, not software experts. Work with the experts. You can have everything you need as part of a monthly software subscription and some up-front customizations. Bottom line – you can have everything you need – AND save money.
Take control of your LP experience. Whilst many PE / VC companies work with fund administrators to service their clients, you don’t need to utilize the portal technology they propose. It’s typically a sub-standard, minimal functionality solution that they provide to ‘expose’ documents and transactional information to your LP’s. Some of you may have more than one fund admin, and more than one portal. That is a terrible experience for your LP’s. They are required to log into multiple portals, just to get a view of their total relationship with you. Instead, provide them with a single portal through which they can view all of their investments, their tax documents, their statements, fund updates, capital call notifications and more. With providers like Asset Class you can consolidate all of these into a single portal, and take complete control over the experience your LP’s have with you. These are your LP’s – not your fund administrators. If you don’t look after them, some other fund will.
Start now. In high inflation, possibly recessionary times, you need to look at how easy it is to do business with you. You need to lower the cost of servicing your LP’s, lower your cost of capital, stand out from other funds, attract investors. By adopting true ‘Investor lifecycle management’, and offering potential investors online, instantly accessible fund offerings, a streamlined subscription management experience, 100% online servicing options for all investor correspondence and more, you can achieve all of these objectives. The digital divide between those firms that adopt digital-first practices and those that get left behind is here. Act now.
Talk to us today about how we can help. We are Asset Class, and we sit at the heart of every private capital investment.
