So we’ve already touched upon having a complete view of investments and how tools such as filtering and sorting improve visibility and organization. But there is a more fundamental problem that many investment firms are facing ― the ability to view specific information across your portfolio. The flow of documents has been increasingly difficult to keep track of and organize. Partners tend be responsible for a couple of portfolio companies and receive those companies documents and updates and everything is great, right? Not exactly.
Pain #3- I have no way to see specific information across my WHOLE portfolio.
Not being able to see information across the whole portfolio is just another challenge we hear from clients. Having a partial view of the firm’s portfolio weakens the ability to ascertain the real state of the entire portfolio. Solution: storing all investment documents in one solution that allows for sorting, filtering, and searching. But why is it necessary to be able to view this specific information across your portfolio?
Records cannot currently be organized by specific information types.
You may already have folders in email or on your hard drive and the folders may be organized. Let’s say you have them sorted by investment companies. And in that folder you have more folders of board packages, financial reports, etc. Or maybe you have your folders set up by document type, and then play the “find the investment company” game instead. Wouldn’t it be easier to keep track of the whole portfolio and be able to get a different view depending on what is most convenient at a specific point?
- See by investments - would allow you to see every company in your portfolio, but easily access the documents you need.
- See by date - would allow you to quickly access the newest information to catch up, prepare for meetings, or see everything you were doing at a specific time period.
- See by document type - would allow you to see all types of documents that are in the system and know which investments have which documents available.
- See by sector - would allow you to break down investments by industry or sector. Let’s say there are new regulations for the clean-energy industry; this is a great tool to know who would be affected and contact those investments quickly.
Ok so now you should be able to find you documents, but can you see your WHOLE portfolio in a calendar grid view? Do you know if portfolio companies are giving you their financial reports and board packages when they should be? Do you know when they are due?
- A “birds eye view” grid of the year and portfolio companies makes it much easier to see the status of companies and if reports are available. At a glance, you would be able to know whose reports are done, whose are not done, and when you are owed more information. I’m sure you can appreciate being able to look at one screen and being able to access the board packages and financial information for your whole portfolio. Just imagine all the time you’ll save from just not having to search across your portfolio!
These are just a few more solutions to build your complete view of your WHOLE portfolio. Find out more about these solutions.
Let’s continue with the theme of not being able to get a complete view of your investments. What happens when there are interruptions in business or in the company and you don’t have a complete view? Like it or not, issues, such as staff turnover, information not getting backed up or being completely lost, lack of access to information, and natural disasters do happen. Nowadays, it’s a common practice among businesses to have comprehensive approaches, or business continuity plans, to minimize these disruptions. But what about your firm, have you evaluated how your company will deal with these issues if they arise? Even if everything is running smoothly now, have you addressed your points of potential weakness? Do you have a business continuity plan in place as a preventative measure? Where will your critical investment information be if something goes awry?
The flip side of having a business continuity plan is actually having business continuity; a way of ensuring your clients and partners that they will have access to their information if something does goes wrong. This could include many of the daily routines of project management, keeping good communications, keeping things backed up and keeping updated reports. Good business continuity tends to be a manual and costly process, making operations harder to maneuver, which brings us to the next pain we relieve for our clients.
Pain #2 - There is a lack of business continuity in my office/ operations are hard to control.
- Critical investment information is kept in one place and not backed up.
Whether the information is stored in someone’s email, on one person’s hard drive, or in a filing cabinet next to your desk, there are numerous ways that information can easily become inaccessible. Is your information backed up? If the information is in the cloud, is it backed up on multiple servers? Are the servers on different power grids? If information is lost, one way or another, is recovery possible? If critical information is lost, it is imperative that recovery occurs in a timely fashion.
- There is no business continuity plan/ there is a plan, but no business continuity.
If you do not have a business continuity plan in place for your critical documents, start there. It is important to have all critical information in a secure, backed-up, easily accessible place. If you have a plan in place, is your company practicing the plan in a way that LPs and colleagues are comfortable knowing how to access their information if something goes wrong? Communicating with your LPs and internal partners regularly, to keep everyone in the loop, is a significant way to establish business continuity, good governance and consistency. If you have your information in the cloud, providing a user portal for access to the information is also a key way to provide ease of access to information.
- The daily operational tasks of properly managing my investments are getting hard to handle.
Trying to manually maintain work flows of investments can be extremely time consuming, not to mention, costly to the company. Providing a good flow of communications between the company and LPs and investments is already quite a feat. Now add on the responsibilities of keeping all the information backed up, organized, readily available to everyone, in reports to be analyzed, etc. And then when a document is updated, starting the process again…it’s exhausting!
What do I need to solve these issues?
Organizing information on a secure cloud-based solution, backed-up on multiple servers (and on different power grids) ensures the security of information and its timely recovery in the event of data loss. Online user portals make accessing information easy but also make it possible to segregate information by role. Automated emails can also help the daily operational responsibilities. Capital calls, board packages, K1s, etc. should have reminder and chaser emails setup. Notification emails of when new or updated information is put into a system are another great way to keep everyone on the same page.
Find out more about how DocDep can provide the solution. Or get a deeper view into the software by requesting a demo.
It’s no newsflash that the financial world is tightening; government regulations are being put in place, shareholder demands are increasing, and competition for raising capital is becoming stiffer. As alternative investors are being put under the microscope, transparency and good governance are now a necessity. This increased scrutiny has created increased demand for automation or “straight through processing” to be put in place.
As a result, there has been a progression of VC and PE firms investing in “back office systems” to help manage and automate workflow of things like capital calls, LP communications, and accounting. With cloud-based and SaaS vendors steadily making their mark in the industry, this structure and automation has become more readily available. So it seems only natural that front office automation would be next. It is practically essential to leave the world of manually building Excel spreadsheets and storing in email folders. As of now, financial information tends to be kept in long and cumbersome spreadsheets. This creates information loss, inaccuracies, and inefficiency. A structured, automated, easy to read system would not only takes care of these issues, but would offer the good governance and transparency companies need today.
“In another year, using automation in only half the office will just not cut it”, says Farid Naib, an experienced investor, entrepreneur, and DocDep CEO. “Adopting a more complete system will provide exponential benefits to VC/ PE firms. Increased automation will allow firms to more easily comply with standards such as Dodd-Frank, and improve business continuity and operational efficiency.”
This new operational efficiency is available with cloud-based, structured systems, such as Sonar from DocDep. With tools such standard and ad hoc report writers, predefined and customizable snapshot matrix views of investment information, and sorting and filtering capabilities, the front office can join the automated world.