Case Studies - YFM
Venture Capital fund achieves greater control and improved efficiencies...
The Capital Fund, a venture capital fund, seeks to invest in high growth potential SMEs (Small and Medium-sized enterprises) in the Greater London area. SMEs looking for finance to expand their business will submit applications to The Capital Fund in order to be considered.
Typically in the venture capital industry, applications for investment are made by submitting a business plan. As there is no standard format for entrepreneurs to work to, these can vary dramatically in format and size and subsequently become unnecessarily time consuming for investment staff to extract relevant information.
Working in this way, it is not uncommon for venture capitalists to take a number of weeks to revert to an applicant with an initial response of interest due to a backlog of submitted plans. Due to this, The Capital Fund wanted to find an alternative, more efficient method of reviewing initial applications which would benefit both the Fund and the applicant.
To begin with, a simple Access database was used to monitor progress and report on each application in the pipeline. The system was basic and limited in being unable to generate management reports with the necessary level of sophistication and complexity required of a commercial Fund.
DBL was presented with this situation and asked to provide a solution that would deliver greater efficiency and improved levels of control and reporting.
The first step was to introduce a web-based application form that enabled the Fund to control the focus and amount of information provided by applicants at this initial stage.
DBL developed an interface that would upload each submitted application into a SQL Server database, and also provided a Visual BASIC client for users to review these submissions. A process-driven structure was built-in to manage and monitor each application up until the point of investment. Creating this tool resulted in a dramatic reduction in time spent on reviewing, processing and managing each application.
Applicants appreciated the timely manner in which the Fund responded to their proposals and favourable comments by word of mouth have resulted in more applications being received by the Fund.
The DBL process flow and reporting structure also enabled customised management reports to be generated, previously unavailable through Access. Deal progress can now be managed more tightly and key internal and external stakeholders who require regular updates are kept better informed.
The Capital Fund is one of many funds under management by YFM Group. Due to the success of the Deal Flow system there, it has since been adopted by other funds within the group.
Since then, DBL has gone on to develop and implement a system to monitor completed deals within their portfolio of invested businesses.
The Portfolio Management system was integrated with the Deal Flow system and provides a central repository for retaining all information on transactions, accounts, share capital structures, key contacts etc. External information is gathered using web-based forms and formatted spreadsheets developed by DBL.
Once again, manual transcription of information or looking at monitoring information via inconsistent formats is no longer necessary. The Fund now has more time to spend analysing and aiding the performance of individual companies.
Caroline Hattan is the Portfolio Executive for The Capital Fund and has been closely associated with DBL throughout these developments.
Caroline comments that the custom software route suits them perfectly:
"Standard packages are fine if you don't know what you want, but in our case we did, we just didn't have the knowledge or expertise to produce it. With DBL we got exactly what we wanted at a fraction of the price for a standard package."
"We have found DBL fantastic to work with. They have helped us achieve exactly what we wanted, and have done this in a very cost efficient way, working to very tight deadlines. We have never been disappointed."
Caroline Hattan, Portfolio Executive, The Capital Fund.