Private transactions are a vast, often unstructured market with a big emphasis on informal networks. Just think of all the ‘friends and family’ money in the early stage investing market, the angel networks and the importance of their activity. In recent years the uptick of small funds, ‘super angels’, online syndication and co-investment models have paved the way for various family office, smaller funds and private investor networks to question the way they operate. Could structuring the informal networks into a catalyst for larger impact bring more bang for your buck?
The answer is a resounding “Yes!”, but that rarely gets translated into practice in a meaningful way. Why not?
In our experience, angel networks need a slight push to make the change in the way they operate and the tools they utilize. Its not because of lack of need, the tools they typically use are often quite outdated (imagine spreadsheets flying around and informal monthly meetings), but rather the lack of bandwidth to make the change.
Often its seen as an exorbitant undertaking to tie your proprietary network and assets into a tool, without knowing of the long term future of that tool or provider. These are all valid concerns, but with the API economy and tools like the Crowd Valley Digital Back Office, they are manageable. No longer do smaller funds need to consider a go to market in years and lock themselves into a suffocating relationship; pay-per-use, free, comprehensive documentation and tutorials for deployment and no lock in have become best practices in the online world.
Its an efficiency play, right? No, that’s only the start.
Look at how private transactions are coming online. Look at the online investing platforms, business debt brokers, startup investing sites, online wealth managers and syndicate platforms. Leveraging these organizations and the ecosystems that is being created is not only a good idea, it will be imperative for any operation of sufficient impact. Saving money and time in structuring, closing deals and sharing best practices, is all very important. However, staying relevant with partner investor groups, being able to communicate with stakeholders efficiently with the right structure and data models - let’s face it, an excel spreadsheet is just not going to cut it.
We’re a small fund, informal investor group – what can we do?
Get organized, get smart and plug into the vast distribution, syndication and structuring opportunities. How? Practically speaking bringing online offline processes requires creating an interface, where the organization can populate their existing dealflow, deal rooms, investors, documentation and pertinent information (with secure access controls, verification checks and restrictions in place). This is what the Crowd Valley Digital Back Office and API allow, and give you access to both own your own marketing application and choose what services and tools you pull into use.
Effectively doing this, would allow the organization to seamlessly cross pollinate with both existing stakeholder groups as well as new online networks: send deals to one another for syndication, share diligence and best practices, share knowledge materials and discussions and send alerts to one another. It could truly revolutionize the way some of these informal networks work and make them a lot more structured!
Why isn’t this happening in the market?
Good question, but the wrong one I’m afraid. It is actually happening, both from individual stakeholder groups and from the top down. The call for structuring informal capital deployment platforms has large dependent groups, in fact we see it clearest in the impact / philanthropic investor space - there is no excuse for not getting the capital into the actual targets intended. Seeing capital wasted into operating processes doesn't warm anyones heart.
There are various tools at your disposal today and they don't require an informal investor group to hire one of the big four. What they do allow is tapping into the digital age of online finance, and invite the right capital sources and partners to work directly with your investor group.
In our experience, angel networks need a slight push to make the change in the way they operate and the tools they utilize. Its not because of lack of need, the tools they typically use are often quite outdated (imagine spreadsheets flying around and informal monthly meetings), but rather the lack of bandwidth to make the change.
Often its seen as an exorbitant undertaking to tie your proprietary network and assets into a tool, without knowing of the long term future of that tool or provider. These are all valid concerns, but with the API economy and tools like the Crowd Valley Digital Back Office, they are manageable. No longer do smaller funds need to consider a go to market in years and lock themselves into a suffocating relationship; pay-per-use, free, comprehensive documentation and tutorials for deployment and no lock in have become best practices in the online world.
Its an efficiency play, right? No, that’s only the start.
Look at how private transactions are coming online. Look at the online investing platforms, business debt brokers, startup investing sites, online wealth managers and syndicate platforms. Leveraging these organizations and the ecosystems that is being created is not only a good idea, it will be imperative for any operation of sufficient impact. Saving money and time in structuring, closing deals and sharing best practices, is all very important. However, staying relevant with partner investor groups, being able to communicate with stakeholders efficiently with the right structure and data models - let’s face it, an excel spreadsheet is just not going to cut it.
We’re a small fund, informal investor group – what can we do?
Get organized, get smart and plug into the vast distribution, syndication and structuring opportunities. How? Practically speaking bringing online offline processes requires creating an interface, where the organization can populate their existing dealflow, deal rooms, investors, documentation and pertinent information (with secure access controls, verification checks and restrictions in place). This is what the Crowd Valley Digital Back Office and API allow, and give you access to both own your own marketing application and choose what services and tools you pull into use.
Effectively doing this, would allow the organization to seamlessly cross pollinate with both existing stakeholder groups as well as new online networks: send deals to one another for syndication, share diligence and best practices, share knowledge materials and discussions and send alerts to one another. It could truly revolutionize the way some of these informal networks work and make them a lot more structured!
Why isn’t this happening in the market?
Good question, but the wrong one I’m afraid. It is actually happening, both from individual stakeholder groups and from the top down. The call for structuring informal capital deployment platforms has large dependent groups, in fact we see it clearest in the impact / philanthropic investor space - there is no excuse for not getting the capital into the actual targets intended. Seeing capital wasted into operating processes doesn't warm anyones heart.
There are various tools at your disposal today and they don't require an informal investor group to hire one of the big four. What they do allow is tapping into the digital age of online finance, and invite the right capital sources and partners to work directly with your investor group.
About the author - Markus Lampinen
Internationally awarded digital finance entrepreneur, active in pioneering new securities models worldwide. Has worked in digital finance since 2009, recruited over 100 individuals, built up a operations on six continents and been recognized as one of the top 100 thought leaders in crowdfunding. Markus has pioneered new funding models in the US and Europe, advised policy makers worldwide - including the SEC, the European Commission and Italian regulator CONSOB - for more effective markets, and worked with visionary organizations such as the World Bank and the Kauffman Foundation to improve frameworks for digital finance. Markus has studied computer science and economics (M.Sc).
Internationally awarded digital finance entrepreneur, active in pioneering new securities models worldwide. Has worked in digital finance since 2009, recruited over 100 individuals, built up a operations on six continents and been recognized as one of the top 100 thought leaders in crowdfunding. Markus has pioneered new funding models in the US and Europe, advised policy makers worldwide - including the SEC, the European Commission and Italian regulator CONSOB - for more effective markets, and worked with visionary organizations such as the World Bank and the Kauffman Foundation to improve frameworks for digital finance. Markus has studied computer science and economics (M.Sc).
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