As your firm seeks to raise capital in a competitive landscape, the seemingly small things — like the experience your investors have with your digital interfaces — can potentially make or break your fundraising effort. Digital experiences go beyond aesthetics: whether you’re aware of it or not, the experience LPs have with your digital interfaces is an integral part of your firm’s brand.
Your digital experiences are your brand
Your firm’s brand is more than its logo or color palette. Just as you’ve carefully crafted an investment thesis and communication strategy, you must also consider how your investors will engage with you digitally: your website, data room, and onboarding, to name a few. These interactions need to be intuitive and user-friendly: your investors need to know what you need from them and how (and why!) they should deliver it to you.
For many investors, especially those newer to alternative investments, the digital experience can be one way they gauge a firm's reliability. A well-designed website, seamless onboarding, and a user-friendly investor portal serve to enhance the perception of your firm and build trust. In the end, it’s the firms who’ve figured out strategically how to make their investors feel good and give them some sort of differentiated value that end up on top: it’s about the emotional coupled with the rational.
You have to meet the new investor where they’re comfortable: digitally
Retail investors are a fast-growing segment in private capital, and they generally have the highest expectations when it comes to digital interactions.
The unprecedented transfer of wealth from baby boomers to millennials that is likely to occur in the coming years — some US$68 trillion by 2030 — will likely heighten the calls for tech-enabled services, as millennials are the first truly digital-native generation. Your onboarding and communication needs to be thoughtful in order to minimize friction and maintain the loyalty of these investors.
Besides going direct, investors have more digital pathways into private funds than ever. Moonfare and iCapital have built platforms aimed at either financial advisers or directly at individuals that offer low-cost access to a wide range of alternative products.
Moonfare is a fast-growing direct-to-consumer platform based in Berlin that offers self-certified investors access to PE funds by pooling individual investments. iCapital is a much larger firm based in New York that uses a similar pooling model to aggregate investments in buyouts and other types of alternative investments. The growth of these and similar platforms are strong indicators that the market is quickly upping its game by investing in deeper digital strategies.
Your time is too valuable to spend on data wrangling
Investor relations teams have a rapidly expanding surface area of responsibility. Manual tasks — like data entry, document management, and communication tracking — can quickly consume valuable time that could be better spent building relationships with investors.
For example, your CRM can be configured to automate follow-up communications, track investor interactions, and manage data on investor preferences and behaviors to inform tailored outreach efforts, making interactions with your investors more meaningful.
Investor onboarding and KYC/AML compliance is an aspect of fundraising where a streamlined, digital experience is quickly becoming table stakes. A meaningful, well-thought out platform that delivers your sub docs to your LPs digitally can do more than just replace a pdf: it can reduce the time to onboard and give IR teams time back for quality conversations with LPs about your fund’s strategy and how their capital is being invested, instead of tedious details about documents. It’s why Passthrough exists, to benefit both you and your investors.
Moving forward, digitally
The digital landscape is rapidly evolving, and private capital firms need to adapt thoughtfully to stay competitive. Investing in digital infrastructure is not merely a trend; it is a necessity in order to attract and retain investors.
Your firm should conduct regular assessments of its digital strategies, soliciting feedback from investors about their experiences and preferences. By understanding the evolving needs of their investor base, you can refine your approaches, ensuring you remain relevant and responsive.
Ultimately, the digital experience should not be an afterthought; it should be a core component of your firm’s overall strategy. As private equity and venture capital firms navigate the complexities of fundraising, prioritizing the digital experience can lead to greater success, stronger investor relationships, and a more robust brand identity.
Find out how Passthrough can give your investors a simple, seamless digital onboarding experience. Get a demo today.
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