Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
00:32:48 · Michael Sidgmore, Venkat Subramaniam
[00:32:48] S1: On the flip side of this, there's obviously certain aspects of these processes that are still manual. What in your mind is the hardest problem to solve right now, and where would you love to see technology fill the gap solving some [00:33:05] S2: of those problems? Lot... Lots of hard problems. If you look at our road map, you'll see there's still lots of hard problems to solve. I think the the hardest problem I would say is if you have softwares like ours and you consolidate all the data, making use of the... This data at the fund level. So this becomes a source data for, let's say, carry modeling. And then this also becomes a source data for some very complex things like investor tax reporting, your k ones in The US. Now, how do you connect all these portfolio level underlying information through the funds all the way to the LPs for your tax reporting? How do you connect that for your carry modeling? How do you enable funds to visualize what the funds positions look like across all the portfolio companies by changing variables? That's the power of a software. So if you have all this data in software, how do you leverage off that? I think those are the sort of very hard problems, but you have to start from the bottom up. But that... That's what we're excited about. Think a lot of tech starts from top down in in private equity. Start from bottom up there. There are some very interesting possibilities. Very hard ones, but they become meaningful.
00:33:05 · Venkat Subramaniam, Michael Sidgmore
[00:33:05] S2: of those problems? Lot... Lots of hard problems. If you look at our road map, you'll see there's still lots of hard problems to solve. I think the the hardest problem I would say is if you have softwares like ours and you consolidate all the data, making use of the... This data at the fund level. So this becomes a source data for, let's say, carry modeling. And then this also becomes a source data for some very complex things like investor tax reporting, your k ones in The US. Now, how do you connect all these portfolio level underlying information through the funds all the way to the LPs for your tax reporting? How do you connect that for your carry modeling? How do you enable funds to visualize what the funds positions look like across all the portfolio companies by changing variables? That's the power of a software. So if you have all this data in software, how do you leverage off that? I think those are the sort of very hard problems, but you have to start from the bottom up. But that... That's what we're excited about. Think a lot of tech starts from top down in in private equity. Start from bottom up there. There are some very interesting possibilities. Very hard ones, but they become meaningful. [00:34:15] S1: Do you think more technology in private markets will start from bottom up, single source of truth on up?
00:34:15 · Michael Sidgmore, Venkat Subramaniam
[00:34:15] S1: Do you think more technology in private markets will start from bottom up, single source of truth on up? [00:34:22] S2: I think so. Absolutely. That's the way to go. I think if you start from bottom up, possibilities open up. Top down, I think you're limited by the quality of data here because you're always reliant on the underlying data. But if you start from bottom up, you can build... Carta is a good example on the venture side. I think they started... If you look at where where they're going now, they started with cap table, which is bottom up. But now they're kind of using all this data in the venture fund business. Yeah. [00:34:50] S1: I mean, that's a really interesting point, and I think that gets to the experience or talent question in private markets. Do you think it requires someone who came from industry and was a practitioner to be able to go bottom up? Because you actually have to understand the problem in a way that you actually dealt with it.
00:34:50 · Michael Sidgmore, Venkat Subramaniam
[00:34:50] S1: I mean, that's a really interesting point, and I think that gets to the experience or talent question in private markets. Do you think it requires someone who came from industry and was a practitioner to be able to go bottom up? Because you actually have to understand the problem in a way that you actually dealt with it. [00:35:05] S2: It's a very interesting question. I think my view is you need to understand the problem, but you need to be passionate about the problem. You need to feel very strongly about the problem, and you need to have the desire to solve it. I think if you don't have the latter, it becomes very difficult when you're building because building is challenging. Because building is not just building software and silos, it's stakeholder management. It's lots of other things. But I think one benefit people from the industry have is they understand the problem, and that's half the battle won. And then if you're passionate about their problem and you feel strongly, then you're off to the races. The difficulty is always engineering. Right? Because you need to very quickly learn that. So you will need to invest time in some place. I'd rather try and understand engineering... Rather know the problem and be passionate about it than be an engineer in in the problem that we are solving because it's very esoteric. It's very complex. And once you're passionate about the problem, you know it, it becomes easier.
00:35:05 · Venkat Subramaniam, Michael Sidgmore
[00:35:05] S2: It's a very interesting question. I think my view is you need to understand the problem, but you need to be passionate about the problem. You need to feel very strongly about the problem, and you need to have the desire to solve it. I think if you don't have the latter, it becomes very difficult when you're building because building is challenging. Because building is not just building software and silos, it's stakeholder management. It's lots of other things. But I think one benefit people from the industry have is they understand the problem, and that's half the battle won. And then if you're passionate about their problem and you feel strongly, then you're off to the races. The difficulty is always engineering. Right? Because you need to very quickly learn that. So you will need to invest time in some place. I'd rather try and understand engineering... Rather know the problem and be passionate about it than be an engineer in in the problem that we are solving because it's very esoteric. It's very complex. And once you're passionate about the problem, you know it, it becomes easier. [00:36:03] S1: On the flip side, you work with a number of different private equity firms, large, small, different jurisdictions. Do you find that they have very different problems that they're looking to solve, or they all have a similar problem that they wanna solve when it comes to cap table management and back office software? So every PE fund will feel that they are unique,
00:36:25 · Venkat Subramaniam
[00:36:25] S2: and they will be unique in many ways because it's a people organization. And so individuals are very different, and there'll be different ways in which they're working. When you drill into the data and when you start looking at breakdown the processes, quarterly evaluations, what tax is doing, what legal is doing, it's the same. And the dataset is the same. So the the beauty with the software is you can bring them all together and you can create those process, allow people to do what they've been doing and contribute a lot better. But we don't see a major difference between large and small. Where we see a difference is getting them the behavioral change. I think in smaller funds, as we discussed earlier, it's a lot easier to get the behavioral change going. Whereas in the larger fund, if it doesn't come from top down, it can take a lot longer. Because people carry on working in Excels. They may not connect the dots. Somebody doing quality evaluations might be passionate about those Excel files, and they might be very keen to do the way they're doing it without realizing what it means from a kind of larger standpoint. So you need the decisions to come in from top down, and then you can... To affect behavioral change. Smaller funds is easier because the people who are the decision makers often are also the people who are experiencing the problem. So it's concentrated.