Running a business is hard enough without an admin problem sneaking up on you. Raising capital feels like the finish line, but it's the start of a new job: looking after the investors who just backed you.
Here are five reasons why it pays to put a cloud-based, digital investment management infrastructure in place early.
1. Investor management gets messy fast
Most companies start small: a handful of friends and family investors, tracked on a spreadsheet, updated over dinner conversations. Add a dozen outside investors and that excel spreadsheet turns into a liability.
Registry management is not something to get wrong. Even the most infallible employees make mistakes, some of which carry financial or reputational risk. A secure investor management platform takes you off those precarious excel sheets and into a tech universe full of possibilities. Just one example of its capability is setting automated, recurrent distributions that land in an investor’s bank account - all at the touch of a button.
Registry management also covers CRM, compliance, document storage, reporting and more. Tax statements, distribution reports, quarterly updates, and business appraisals can be auto-populated and sent to all your investors in one go. Third-party providers can offer a registry service, but a digital, self-serve solution gives you a branded investor experience and keeps you in control of the relationship.
2. Investor relations - putting your investors first
Investors today expect access. They want their portfolio data available whenever they want it, along with the ability to review documents and complete applications online, without needing to email anyone.
That doesn't mean the personal touch disappears. Boutique fund managers still win repeat business through direct relationships, but that's easier to sustain when it's backed by a system that handles tailored, branded communication in the background. Self-service tools take routine questions off your plate so you can focus on the relationships that need a human touch.
3. Liquidity makes your offer more attractive
Private market investors know they're in for the long haul, but that doesn't mean they don't think about an exit. Liquidity options are becoming more common in private markets, and it's a real selling point: it makes your offer more attractive to prospective investors and lets you bring in new investors even after your initial raise has closed.
To remain competitive, investment managers need to get ahead of the competition and add liquidity to their story. There are different ways to achieve this, but fairness, accessibility and transparency are most important to investors, and a digital, admin-light, efficient platform is most important for the manager.
4. Professionalise your business, for maturity or pre-IPO
The investment arena is highly regulated and is becoming more complex. Streamlining this business aspect from early on allows you to keep it manageable. With clean and orderly data a company can adjust to new and changing regulatory requirements as they occur.
This matters even more if you're eyeing a future public listing. Getting used to proper disclosure and reporting standards early is good practice for what's coming, and it puts you in a stronger position when you're competing for capital.
5. Stick to your vision - don’t get distracted by back-office admin
Nobody starts a company because they love registry management. Manual, error-prone admin work eats time you'd rather spend building the thing you actually set out to build. A system that handles the day-to-day mechanics reliably, and can scale as you grow, frees you up to focus on running the business.
Syndex has the cloud based digital investment management platform to help support your business. Registry management, investor portal, capital raising, liquidity; all on one unified platform. Ask us for a demo.
