Your investor relations (IR) team is a crucial part of every capital raise. But as capital raises have become so complex that they last nearly twice as long as they did in 2020, IR professionals have become stuck spending more time managing the plumbing behind the scenes.
Instead of communicating your market advantages clearly, anticipating important questions, and building trust with your investors, they might instead be translating the cap table between investors and finance, chasing funding confirmations, and struggling to assemble a clear picture of precisely where the raise stands.
Streamlining your capital infrastructure presents the opportunity to save time and money while keeping all the moving parts of a capital raise clear and easily accessible. But perhaps even more important, it lets your IR team get back to building and growing those crucial investor relationships.
Nobody Thinks About the Plumbing Until It Breaks
You’ve probably never had guests gush about your phenomenal plumbing. When it works as it should, it’s invisible. But if there’s a backup, the plumbing will quickly become all anyone is thinking about. And of course, someone will call a plumber immediately.
Likewise, when something goes wrong with any one of the many pieces of capital raise infrastructure, IR receives an urgent call.
IR generally doesn’t own any of this infrastructure and rarely has a clear view of it all. But because they are the face of the operation to every LP in the deal, the call goes to them rather than to someone on the finance team or the banking partner.
The Fires IR Is Putting Out
A wide variety of situations in a capital raise can trigger a call to IR:
- A depository account in a separate baking portal that can’t be quickly accessed when investors call to confirm their capital was received
- A KYC tool disconnected from the cap table making it difficult to confirm which investors have been cleared
- A cleared wire that hasn’t been reconciled against the cap table yet
- A distribution that went out via wires through a separate system, requiring significant time and effort to reconstruct
Any situation that can result in an LP not getting the answers they need gets routed through your IR team. And every instance represents time they aren’t spending communicating your market advantages clearly, anticipating important questions, and building trust in what you’re building.
Why Fragmentation Lands on IR
Communication is a huge part of IR’s role, and disconnected systems create serious communication gaps that need to be bridged fast.
When investment data, funding status, and investor verification live in separate places, IR becomes the human glue tasked with holding them all together.
Unfortunately, when IR lacks the access or context to connect everything well and find answers fast, the result is slower response times, vague answers, and a creeping erosion of the investor experience IR is supposed to own and protect.
Unified Capital Infrastructure to the Rescue
Prioritizing visibility and interconnected workflows across all your capital infrastructure processes can eliminate many of these issues. Ensuring that raise management, investor communications, capital intake, and banking live closer together ensures that your IR team gets a level of visibility that wasn’t previously possible without a finance intermediary.
Managing investor relationships well requires a connected view of the capital process beginning with first funding, extending across the cap table, and continuing with every distribution that follows.
Don’t Let the Plumbing Steal the Show
The best IR pros got into this business because they’re good with people. They know how to build trust, communicate clearly, and make investors feel like partners in something worth being a part of.
Capital raises are complex undertakings, and there will always be room for improvement in the associated processes and systems. But when that infrastructure is seamlessly connected and highly visible, the mechanics of it all become invisible in the best way.
That’s when your IR team gets to stop turning wrenches and get back to the work you hired them for in the first place.
Streamline Your Capital Infrastructure with InvestNext
If you’re a sponsor looking to simplify your capital raises and give your IR team their time back, InvestNext is a concrete place to start. InvestNext lets you embed your business account, capital intake, cap table reconciliation, and distributions directly into the raise management platform.
IR and finance will finally be working from the same picture. That means less confusion, fewer unanswered questions, and happier LPs.
Case studies demonstrate how InvestNext is delivering results including 90% reduction in administrative burden, 95% reduction in investor onboarding time, and 147% active investor growth.
A demo can give you a firsthand look at what InvestNext could do for your capital infrastructure.
