BY Brock Murray Chief Executive Officer katipult.com, CROWDFUNDING BEAT GUEST POST.

Private capital markets are plagued with compliance requirements and operational inefficiencies, and software can eliminate many of the pain points from deal administration to investor reporting. For this reason traditional finance firms are looking at investment crowdfunding, peer to peer lending, and investor management solutions to stay relevant within this industry among the upstart Fintech (FInancial Technology) players.

In order to be successful, it’s pertinent to avoid the following pitfalls that often leave teams frustrated, sidetracked, and wondering what went wrong:

  1. Insufficient Preparation. Many firms, uneducated and uninformed, don’t prepare appropriately and assume everything will work just like it did for the industry leaders. Critically thinking through the platform requirements, validating/invalidating assumptions, and having a detailed and prioritized roadmap will create efficiencies in the long run, despite initial delays.

 

  1. Underestimating Resources. Moving operations online isn’t easy. Your technology is crucial for success. While there are compliant software products available that have the core functionality your firm needs, there will likely be configuration requirements or modifications. Launching the platform is 50% of the battle, having it successfully implemented and adopted by your stakeholders is the other 50%.

 

  1. Unrealistic Expectations. Approach your platform initiative within the realm of possibilities and on a multi-year timeline. Launching a platform isn’t a miracle solution for investor growth and capital raising. You will need to have realistic operating goals and a measurable strategy to ensure targets are achieved month over month.

 

  1. Eliminating Human Element. The assumption that the human element of the investment process is eliminated with an online investment platform is terribly incorrect. Online and offline processes are meant to compliment each other. The software eliminates inefficiencies, redundancies, margin for error, but it’s not meant to replace your sales, marketing, or investor relations staff. Use investor analytics to understand your investor behaviour and follow up with phone calls and emails to ensure you get the most out of each user interaction.

 

  1. Superficial Distractions. Stick to your core competencies and focus on business development. Too many firms are consumed by adding bells and whistles to their technology, trying to reinvent processes, or worrying about what may or may not happen 1 year out. Remember data drives decisions, not assumptions. All efforts should be defined and concentrated on the business fundamentals to generate business.

 

  1. Forgetting Securities are Sold NOT Bought. Investors need direction, support, and explanation. An investment platform is an extension of your process, not a replacement. If you build it, they might not come. Leverage the technology for exponential growth and operational efficiencies.

 

 

About Katipult

Katipult is cloud-based software infrastructure that allows companies to design, setup, and manage an investment crowdfunding platform.We provide unparalleled adaptability and flexibility for regulatory compliance, diverse asset structures, business model specifications, and localization requirements.