private equity and venture capital investor in the hedge fund world : We try to automate more of our work.
When I was single, I signed up for (many) dating sites. When I met my current wife, I realized that any technology I can use to find a spouse is a killer app. That's why 40 million Americans use online dating sites. But most of the fundraising and sourcing tools were used the same way 20 years ago: networking at conferences (or bars).
Most of us want a spouse and we're done, but in business you want lots of partners. I would argue that the same kind of technology that revolutionized dating can revolutionize our industry.
In liquid markets, most of the calories spent on technology and analytics focus on the choice of trade or "source". There is more room for optimization in all eleven steps of the investment process. Below I will explain how advanced investors use technology and analytics in all business areas. To learn more about this area, I suggest joining the online community PEVCTech, which I co-founded.
Before you can actually invest, you need to manage your fund. This is more difficult than it sounds. In the private equity universe, most partners have a basic education as a deal maker and not as a manager. When I talk to junior executives of private equity firms, the quality of corporate governance is a common complaint.
I have used Asana extensively to manage activities across the enterprise. I also use several live Google Docs to manage the logs and group agendas for my weekly fixed meetings. I use another live Google document to maintain my database of companies that I want to market to other VCs. This Google document contains cut-out and insertable text that I can share with other investors depending on the stage, focus, and appetite.
Other investors use Trello, Basecamp and Monday to ensure that all employees of the company know the long-term business relationships of other investors. short-term OKRs and projects. Point Nine Capital uses 15Five for continuous employee feedback.
One aspect of management that deserves attention is your own cybersecurity, which should only be tackled after a crisis. Small investment firms often have interns and entrepreneurs in their homes, each posing a security risk. (See A Comprehensive Bessemer Ventures Startup Security Guide.)
Kyle Dunn, CEO of Meyler Capital, says, "Investors should focus on building a large audience within a CRM system (with the Ability to categorize your various components); Communicate consistently with this audience. and implement an automation platform that uses the lead score for the profile interest. It sounds easy. In fact, very few asset managers do so. "I agree.
Many tools that have been developed for B2B marketing in general are also relevant to investors. I know of means that use Constant Contact, Goodbits, Pardot and Publicate to create lightweight newsletters for internal and external consumption. A large group of angels uses Influitive, a lawyer management tool to track, activate and motivate their members. Other VCs use Contently * or Social Native * to create relevant content. Meyler Capital takes over the analytical rigor of modern Internet marketing and applies it for fund marketing.
Point Nine Capital's website is now supported by Contentful – Unbounce is used for landing pages and typing for surveys and other data gathering. "We use … TinyLetter for our" Content Newsletter "… and Buffer to schedule social media posts Last but not least, we still publish our famous newsletter with MailChimp." I also use Mailchimp for the mailing lists teten.com and pevctech.com Point Nine Capital uses Mention for media monitoring Teten.com is based on WordPress as my content management system.
I use Hootsuite to coordinate my social media activities, consisting of Teten.com, PEVCTech.com, Linkedin, AngelList, and (passive) Twitter. and Facebook. I use Google Drive to host my conference presentations, all embedded on teten.com. I use Diigo, a social bookmarking tool to record useful websites I've also configured IFTTT so that everything I post on Diigo is shared on Twitter.
Qnary is one of the many tools that you can use to create the virtu expand the presence of your team members. A tool like Quuu identifies relevant, sharable content to keep your social media channels active.
"There are two important aspects of marketing that investors often overlook: automation and analysis," wrote Sabena Quan-Hin, Marketing Manager at Flow Capital. "With automation, you can spend less time on tedious tasks and increase productivity, especially within a small marketing team. At Flow Capital, we use HubSpot's sequences and workflows to automate most of our emails and internal tasks. This gives us more time to build meaningful relationships with prospects and customers. We use Google Analytics, HubSpot, and LinkedIn Campaign Manager for most of our analytics. When creating content, we use tools such as Canva (graphic design) and GoToStage (webinar platform) to create content and share it with potential customers. "
Tim Friedman, Founder, PE Stack, said," If I could give advice to today's managers, it would be time to understand the requirements of the modern institutional LP. In an environment where there are a record number of new funds, investors are investing more in alternatives today. and looking for deeper relationships with managers through direct and co-investments. In recent years, the proportion of LPs using specialized tools to manage and understand their portfolios has grown significantly, including platforms such as Chronograph, Solovis, Allocator, Cobalt LP, eFront Insights, iLevel and Burgiss.
The number of LPs using technology to manage their portfolios will continue to increase, and GPs will find it increasingly difficult to retain and win LPs for GPs who can not provide high-quality data for LPs. We also see the technology assessment as an increasingly important part of LP's operational due diligence. Excel and Google just will not make it if you want to build a high quality institutional investor base. "
A more efficient approach to fundraising than random networking is to break down the universe of limited-partner data to identify them LPs are most likely to find your funds attractive and focus all their energy on them. I've previously published a detailed presentation with sales technology tools that are useful for B2B sales.
Keeping up-to-date with the most important data pursuers in the VC industry: AngelList, CB Insights, Crunch Base, Dow Jones Venture Source, Pitchbook, Preqin and Refinitive Eikon. LPs, co-investors and media representatives use these tools. Therefore, I work for these data providers for free to ensure that their data about our activities is accurate. This is an excellent example of why data companies have significant trenches.
Boardex and Relationship Science facilitate understanding and mapping of social networks to potential limited partners. Cobalt for General Partners supports general practitioners in optimizing their fundraising strategy. MandateWire and FinSearches offer leads on limited partners new mandates that could fit your fund. Evestment is a platform for fundraisers. Evestment TopQ automates the performance calculation for private markets.
I am a strong user of DocSend, a secure content sharing and content sharing platform that seamlessly shares recurring materials with potential LPs. It provides analysis to track shared materials from different senders and to improve content for future leads. Point Nine Capital uses Qwilr to create advanced mobile security.
Most funds open Datarooms to share previous reports, performance data, pitch decks, legal documents, and other fundraising material with LPs. I've seen funds use Ansarada, Allvue, Box, CapLinked, dfsco, Dropbox, Digify, Drooms, Google Drive, iDeals, Intralinks, Ipreo, Merrill Corporation, and SecureDocs for their virtual data spaces. The same tools are used by companies that raise capital.
I've also experimented with the use of services that are marketplaces between LPs and GPs: CEPRES, DiligenceVault, FundVeil, Harvest Exchange and Palico. Some funds use technology-enabled intermediaries to help them sell to retail LPs, eg. Artivest and iCapital Network.
The Deer Isle Group has the D.I.G. A beacon technology system that automatically solicits a universe of over 10,000 institutional investors without having to register LPs for an online fund network.
Crystal uses its online presence to show you how to influence a particular person. X.ai is a virtual assistant who can coordinate the collection of donations and other meetings.