A Guide on Capital Raising Software: What It Is and How to Use It

Fundraising is often no simple task. Not only do you have to convince potential investors to part with their hard-earned money but you also have to onboard them and keep them in the loop once they do.

However, the good news is that the capital raising process is easier now than it was even a few years ago — and that’s thanks almost entirely to advancements in capital raising software. With a platform like WealthBlock, companies can automate and streamline much of the fundraising process while nurturing investor relations by keeping them informed and engaged.

Here is everything you need to know about capital raising software, including the top features to look for and strategies for maximizing its benefits.

What is capital raising software?

Capital raising software is a type of investor management platform that helps GPs and fund managers manage all aspects of the capital raising lifecycle — from initial investor outreach to onboarding to ongoing reporting. When all of these components are working together cohesively, it ensures the continuous funding success of a GP. You’ll get new investors, process them faster, and help existing investors reinvest.

These platforms streamline the fundraising process by automating many of its repetitive, time-consuming tasks (such as data entry, report generation, and investment processing). Capital raising software also serves as a centralized hub for managing investor data and investor relations, ensuring all data and communications are organized and easily accessible.

What are the most important elements in capital raising software?

From reporting templates to e-signing tools to real-time notifications, there are a lot of different features offered by digital capital raising solutions such as WealthBlock. If you want to choose a well-rounded platform that offers all the tools and functionalities you need to raise capital more effectively, here are the most important elements to look for:

Reporting and analytics

Fundraising is most effective when the company’s efforts are based on solid data and actionable insights. But to make the most of the data you have available, you need a tool with robust reporting and analytics capabilities.

There are a lot of different metrics that companies can use to analyze the effectiveness of their fundraising efforts, and the right capital raising platform can make these metrics easily accessible. Some of the most important metrics you’ll want to track throughout your fundraising campaign are the metrics included in these reports:

• Investor engagement reports: Investor engagement reports track the number of investors at each stage of the pipeline, the duration of their engagement, and their activities (such as clicks, views, and document openings). By analyzing these metrics, you can determine which strategies are having the biggest impact on investor interest and engagement.
• Sales reports: These reports provide detailed insights into the performance of sales representatives, including which rep is responsible for which group of investors, the amount of capital closed, and the current pipeline. This helps you evaluate how well your sales team is performing and identify opportunities for improvement.
• Re-investment reports: These reports track the amount of capital that is re-invested by existing investors, and they include details like the frequency, amounts, and types of investments. Understanding re-investment patterns will help you nurture long-term investor relationships, and it also helps with predicting future funding.

The value that comes with tracking these metrics and analyzing them for insights cannot be overstated. And with a capital raising platform like WealthBlock that includes powerful reporting and analytics features, you can unlock deep insights into your fundraising process.

Integration capabilities

Technology is at its best when it’s working together. By choosing capital raising software that offers strong integration capabilities, you can connect the software with all the other tools you’re already using and create a unified technology ecosystem for your firm.

This offers some key benefits. For one, it streamlines internal operations by connecting all of your data sources. This eliminates the need to constantly migrate data from one platform to another. It also largely eliminates the need for manual data entry (and all the potential for error that goes along with it).

An example of what this might look like in practice is integrating your capital raising software with an investor CRM to automatically update investor information whenever there’s a change.

By automating data synchronization and reporting, integrating your capital raising platform with the rest of your firm’s tools save time and resources that can be used for other strategic activities like investor relations and deal-making.

Intuitive interface

Capital raising software tends to include a lot of different features and functionalities. While a broad feature set is important, it’s also critical that you choose a platform you and your team members can easily use.

To balance an abundance of features with ease of use, you’ll want to choose a platform that offers a streamlined and intuitive interface. Features like dashboards that let you view key metrics at a glance, filters and search tools for finding the data you’re looking for, and contextual help for guiding you through complex processes can all help make your experience with the platform much more positive.

Remember that a capital raising platform is only valuable if its users are capable of putting its various features to work. Choose a platform that offers an intuitive interface and is designed for simplicity, and you’ll be much better off in the end.

Fundraising tracking

Selecting capital raising software with fundraising tracking features will help you monitor progress toward your goals and can provide a lot of helpful insights. Be sure to look for a platform that offers real-time updates on fundraising activities so you can stay on top of your efforts and act promptly on investment opportunities.

For example, you can use real-time alerts to notify sales reps when an investor shows interest in a particular deal, allowing them to follow up immediately and capitalize on the opportunity.

You can also use fundraising tracking features to monitor key milestones in the fundraising process so you can ensure your team stays on track and meets deadlines.

Lastly, tracking fundraising activities and outcomes can provide you with a lot of helpful insights into what works and what doesn’t. By doing things like analyzing the timeline of successful deals, you can reveal patterns and best practices that you can put to use in future campaigns.

How do firms use capital raising software?

An advanced capital raising platform like WealthBlock offers many different functionalities, which means there are numerous ways for GPs and fund managers to put it to use.

Here are some of the top ways that private equity and venture capital firms can leverage capital raising software:

Investor relations management

Effective investor relations management is a crucial part of raising capital successfully — and having a centralized database for investor information is a game-changer.

You can easily and efficiently access investor data and create segments based on criteria like investment preferences, communication style, or engagement history for more targeted communication. 

With a capital raising platform like WealthBlock, you can also create an investor portal where stakeholders can access documents, updates, webinars, and other content designed to keep them engaged and informed.

Automated workflows

Automated workflows are a powerful feature of capital raising software that allows firms to streamline a number of repetitive tasks. This includes tasks like document generation, document distribution, investor information collection, compliance checks, and more.

By automating these routine tasks, firms can save a lot of time and free team members up to focus more on other high-impact activities. It also eliminates a lot of the potential for human error by limiting the need for error-prone tasks like manual data entry.

Fundraising communication and marketing

Capital raising software such as WealthBlock provides a range of tools for communicating with investors and marketing your firm’s investment opportunities.

This starts with the ability to organize all your investor data and segment investors into groups based on their type and preferences. By leveraging the segmentation features of capital raising software, you can tailor your messaging in a way that will best resonate with each group. Then, automate your initial messaging and track the results.

The progress tracking tools offered by capital raising platforms are a natural starting place when it comes to fine-tuning your marketing efforts. These tools track metrics such as email open rates, click-through rates, and event participation so you can analyze what is working well and what isn’t. Iterate and refine your messaging as you gather more data on what is and isn’t working.

Due diligence

It’s always essential to perform careful due diligence before taking on a new investor, and capital raising software helps facilitate this process via secure data rooms and document tracking features.

Data rooms provide a secure and controlled environment for sharing sensitive documents with investors, ensuring that only authorized individuals can access the documents. Document tracking features, meanwhile, allow you to track who accesses documents and when, providing an audit trail that enhances transparency and accountability.

Compliance and reporting

Fundraising tends to entail a lot of compliance and reporting requirements. Staying on top of these requirements can be a real hassle, but the consequences of non-compliance are even worse.

The good news is that the automated reporting features provided by capital raising software can make compliance and reporting a whole lot easier. The software generates all necessary regulatory reports accurately and on time, reducing your firm’s administrative burden and its risk of non-compliance at the same time.

Capital raising software also automatically captures and stores all communications, transactions, and document exchanges. This creates a fully transparent audit trail that can be highly beneficial when it comes to demonstrating compliance.

How to implement capital raising software

Think capital raising software might be the right choice for your firm? Here are three key tips for finding the right solution:

Conduct a needs assessment

Before you start shopping for capital raising solutions, you should conduct a thorough needs assessment so you know what to look for. Carefully analyze your firm’s needs, challenges, and objectives, then use that information to guide which platform you choose.

Which time-consuming tasks will you benefit the most from automating? What features will help you improve investor relations and engagement? Asking and answering questions such as these in your needs assessment will help you choose a solution that is aligned with your firm’s needs.

Choose your vendor

Once you’ve determined what your firm needs from a capital raising platform, you’ll have a much easier time selecting one that offers the right features. However, this isn’t the only factor you should consider when choosing a capital raising software provider.

Reputation, customer support, ease of use, pricing, and customization options are other important factors to consider. To evaluate a vendor across all of these key areas, carefully research the software and be sure to check its user reviews. If the software you’re considering offers a free demo, this is another great way to make sure it’s the right choice for your firm.

Migrate the data

The final step in implementing capital raising software is migrating all of your data to the new platform. This step includes the data export, data cleansing, and data import processes.

Here are a few best practices you can follow to ensure the security of these processes:

• Use secure methods for data transport: Employ secure data transfer protocols such as SFTP (Secure File Transfer Protocol) or HTTPS (Hypertext Transfer Protocol Secure) to protect data during transmission.
• Data encryption: You should encrypt data both in transit and at rest to help further protect it from breaches.
• Risk-based data transportation: Use different methods to transport data based on its risk profile. High-risk data should have extra security measures compared to lower-risk data.

Optimize your capital raising strategy with the right tools

Raising capital is easier and more effective when you use the right tools. By streamlining time-consuming tasks, improving investor relations, unlocking actionable insights, and more, an advanced capital raising platform like WealthBlock helps firms revolutionize their fundraising process.

By combining a comprehensive feature set with an intuitive interface and exceptional customer support, WealthBlock stands apart as a leading capital raising solution.

Want to see for yourself how WealthBlock can optimize your firm’s capital raising strategy? Sign up for a free demo today!