Capital Raising Evolution: How Technology Helps Streamline Investor Communications
The past year brought a dramatic shift for fund managers, as investor communications abruptly went virtual. Although technology already played a supporting role for capital raising before the pandemic, digital tools took center stage when in-person conversations posed potential health risks. This dynamic accelerated investors’ acceptance of virtual meetings and due diligence visits and spurred fund managers to further explore purely electronic communication’s potential.
Fund managers are learning to accept the use of digital tools designed to optimize the capital raising process. Let’s examine some of the ways technology can create a competitive advantage long-term by maximizing efficiency and convenience for investor communications.
Digital Tools Add Convenience to Investor Communications
Increasingly, fund managers depend on technology to communicate with both existing and prospective investors. This approach allows all parties to use their time more efficiently. For fund managers who see marketing as a critical aspect of their job, the use and maintenance of CRMs (customer relationship management software) have become an indispensable part of prospect communication. In addition, they use technology to simplify attribution reporting, so their time is better spent on value-added endeavors.
Technology also strengthens engagement by sharing fund information that investors can access anytime, anywhere. Because these relationships are built on trust, it’s vital to keep sensitive material safe. That’s why fund managers have created Virtual Data Rooms to store investor and fund-level communication within secure, cloud-based software.
Videos and podcasts represent another aspect of that “anytime, anywhere” communication ethos. We have observed fund managers enthusiastically experimenting with these media forms to share their messages with investors. That can involve developing a publicly accessible podcast or a video to address potential investors’ due diligence questions. Videos can also be tailored to specific viewers, such as a customized pitch to a particular high-value investor.
As an added benefit, this technology allows fund managers to gauge the interest of potential investors by tracking how frequently particular videos and podcasts are accessed and viewed. Fund managers are also using social media to promote their video and podcasting efforts as yet another way to help their firm stand out from the competition.
Meet Incos.Media: A Firm That Enhances Communication Through Virtual Pitchbooks
One close observer of fund managers’ communication strategies is Incos.Media, a Swiss Financial Services affiliate. The firm creates virtual pitchbooks to capture the attention of potential investors, and it has noticed the same overarching trends we’ve been exploring above. As investors show more interest in the convenience of video pitches and due diligence virtual meetings, Incos.Media has seen fund managers increasingly embrace these approaches.
The result is a two-fold benefit: Video pitches allow improved time management for both fund managers and investors. This means fund managers don’t need to book a flight to make a pitch, and potential investors aren’t forced to carve out slots in their busy schedules. Instead, they can watch video pitchbooks on their own timetable. When the capital raising process is streamlined in this way, it focuses direct interaction on areas that matter most, such as potential investors’ specific follow-up questions and requests for subsequent in-person meetings.
Tech Tools Enhance In-Person Meetings — But Won’t Replace Them
As the pandemic made remote work a necessity, fund managers have relied on virtual interactions to stay connected with investors. When the industry returns to in-person meetings, we believe that technology will remain essential for capital raising success.
Virtual meetings are not a permanent substitute for face-to-face conversations. This is an industry built on relationships, and that requires building trust. If a prospective investor doesn’t have an existing relationship with a fund manager, for example, on-site due diligence is preferred. But we also see the lasting role technology has for the future of raising capital. Increasingly, investors will demand the flexibility of digitized information they can access at their convenience. By refining the capital raising process for fund managers, skillful use of technology can lay the foundation for lasting investor relationships.
Want to learn more about how Incos.Media can optimize your investor communications by leveraging technology to efficiency and engagement? Reach out to a member of our team.