How does a venture capital fund work in terms of Operations?

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Private equity and venture capital funds are an important part of a comprehensive investment strategy for many professional market participants. Investments in private markets allow you to diversify your portfolio and gain access to additional returns by participating in non-public transactions at earlier stages.

The internal kitchen of such funds is usually a rather complex machine, managed by a very small team. In order for a fund to function successfully, this team must have a wide range of competencies:

  • Marketing and fundraising (raising funds from investors)
  • Investor Relations (investor relations and information provision)
  • Generation of new deal flow (Pipeline formation)
  • Management of the existing project portfolio (participation in business development, control, and reporting)
  • Finance and Law (back office)

In many small funds this work falls on the shoulders of a team of 3-5 people. Therefore, it is very important that these people are able to interact effectively in a situation where time is lacking, and basic things like regular reporting or KPI portfolio control are maximally automated. To do this, as data volumes grow, some kind of unified IT system becomes necessary. 

In software development there is a well-known concept of DevOps (Development Operations) – in fact, these people make sure that the product created by the development team, is delivered to the production stage quickly and reliably. Similarly, they often talk about RevOps (Revenue Operations) – a set of systems designed to make your sales funnel work efficiently. By analogy, PE/VC funds need “PE-Ops” or “VC-Ops”, a set of technologies that will simplify their daily work and provide the infrastructure for their key business processes.

We gradually came to the decision to develop our own SaaS product for funds. AIRR is a single platform for managing investment funds. It is a web portal for GPs (General Partners, Managers) and LPs (Limited Partners, Investors) and a mobile application for LPs to track their investments.

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About the author

Natallia Chykina
By Natallia Chykina