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Three Ways to Boost Conversions in the Investor Journey

If you’re reading this, chances are your fundraising campaign isn’t going according to plan. If there's one thing you can do to improve your raise, it's this:

Use technology to optimize the investor journey. That's it.

The fact is, over 90% of errors are human. But you can remove them all through technology, and the firms adopting this are doing well. When I spoke with Chris Shen from Revere VC, he put it best, “When you see the big name firms adopt technology to interact with their investors, to make processes more streamlined, it would behoove you to look at them.

If you’re not sure, here are some quick stats of those using tech to optimize their investor journey and fundraising campaign:

  • Client A: Before using a platform, Client A had to make 55 calls, and it took 6-9 months to close a $10M deal. The first deal he used on the platform, he made 3 calls and closed a $9M deal in 5 days.
  • Client B: Raised $3M in 3 days.
  • Client C: Raised $2.3M in 2 days.

Sound interesting? Then read on to learn how to turn your investor journey into your fundraising campaign.

Define the Investor Journey

So . . . what is it?

It goes by a few different names, anything from investor onboarding to the invest flow. However, the investor journey is more than the series of steps your investor takes to successfully invest in an offering. 

It also includes the experiences your investors have in taking each of those steps. Let’s break it down into two phases: the pre-raise journey and post-raise journey

  • Pre-raise: The first phase is investor acquisition. It begins with your initial interaction and ends when they deposit funds into your account. Your goal is to have them invest in your current offer.
  • Post-raise: The post-raise journey begins after funds are deposited, and their investment is marked as complete. Your goal with your post-raise journey is to keep your existing investors happy. In your future funds, existing investors are four times more likely to invest more money with a General Partner if they’ve had a satisfactory experience.

As a GP, you need to master both phases of the investor journey. As a whole, your investor journey should help your investor answer these questions:

  • Who are you?
  • Should I trust you?
  • Do you understand me?
  • Should I invest in your offering?

Investment sales become a lot more complicated after you get a verbal yes. These steps vary between firms and the types of offerings you provide. To give you an idea, some of those steps include:

  • KYC/AML checks
  • Formal accreditation of the investor or self-certification or income verification for Reg CF/A+ offerings
  • Sign subscription agreements
  • Capital Calls

Each of these steps can easily take weeks. Unlike larger firms, most of us don’t have the luxury of putting our investors in a room and hashing out each step. 

Before you could use technology, closing an investor required mailing in documents and praying they were filled out correctly. You needed back and forth calls to ensure they had everything they needed. If you’re lucky, your investor didn’t get too frustrated and drop out of the deal altogether.

But times are different. Now, we can digitize the entire process.

The optimal investor journey is both your best salesperson and investor relationship manager. It allows you to sell your offering non-stop, all the while guiding investors through your sales funnel and deepening relationships.

The end result? Hyper productivity, higher conversion rates, higher investment amounts, and more frequent investments. 

When to Implement Change

But you might be wondering, “Hey Seth, all this sounds fine and good, but I can’t just restructure my fund overnight.” And no, that sounds like a bad time. Don’t do that.

Every year, hundreds of new funds are hitting the market, and it’s not uncommon for firms to come out with a new fund each year. When you start that next fund, ask yourself what you can do differently. You don’t have to mess with your existing operation and worry about replacing legacy tech.

The fact is, most emerging funds are using technology to gain an edge in capital raising with hyper efficiency.

Now, it’s time for you to do the same.

Refine the Investor Journey

Being clear in your process is important, now more than ever. So take the first steps to develop an investor journey with the investor in mind. 

To create a streamlined experience with high conversions, there are two questions you need to answer. For an investment to go through:

  • What does an investor need to do?
  • What does an investor need to feel?

The requirements your firm will have for investor onboarding will vary depending on your offering. Before you craft the ideal journey, take some time to write down the necessary steps of your offering. How will an investor sign a subscription document? How do you plan to process payments? How will an investor send you their identifying documents for accreditation check? Then cut or streamline steps to reduce friction.

Once you have your list, focus on what your investor should feel at each stage of the journey with all the tools available e.g. interface design, pop-up messages, notifications, reminder emails, follow-up calls or chats, text messages etc. Doing so establishes trust, and trust turns into more frequent investments.

How to Reduce Friction

In each step of your onboarding process, your investor is asking if they made the right decision. Before investors know anything about you, judge your firm through look and feel. You need to create a comfortable, familiar environment to build trust (read about building investor trust in my article here). As your investors interact with you, they form their opinion. Poor website design and a clunky platform could translate as a lack of understanding of technology and UX principles. 

Keep it simple, and close your investors with the click of a button.

Follow these best practices if you want to make your investor onboarding a little less painful, for all parties involved.

1. Reduce the number and difficulty of steps involved. Each step in your process is an opportunity for your investor to back out of the deal. Don’t let that happen. Keep your process transparent and easy to follow.

2. Optimize the user experience. You don’t have to reinvent the wheel. Instead, help your investors feel comfortable with your product by introducing familiar design. For example, a DocuSign study found that an e-signature request with a reminder is three times more likely to be executed.

3. Present information clearly and easily. Deal presentation matters . . . a lot. Make your content as easy to digest as possible by considering the right format. Does this information need to be in a ten word document? Would a presentation or video work better? As an example, one of our clients found out a video deal memo was watched 100% of the time, while only 18% of investors read the written deal memo.

By no means is this an exhaustive list, but it should push you in the right direction.

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Founder, Regiment

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