Last week a fund CFO walked me through the big spreadsheet she runs every quarter-end. Every value in it was typed in by hand. She's great at it, but she spends far too much time pulling numbers together and verifying their accuracy.
Watching her reminded me of college, when my furniture came in a box with a wrench and pages of instructions. I'd spend the weekend on the floor with a bag of parts. The pride of building it myself would quickly evaporate as soon as the chair started squeaking and I noticed six screws still lying on the floor.
The six screws
In a portfolio, the leftover screws are the terms that never made it into the spreadsheet, like a cap on participation that somebody missed, the seniority between two series that changed when new money came in, or the accrued interest on a note that hasn't converted yet. Sometimes it's a whole document, because the amended charter replaced the one that's still sitting in the folder. Nobody notices any of that as long as the spreadsheet looks finished, so you find out the day a partner asks what the fund gets in a sale, or the day the auditor asks where a number came from.
That's also why the verifying takes so long. If every number went in by hand, then every number has to be traced back to a page by hand, and the CFO is the one doing the tracing.
A fully built chair
The tools most funds use to manage a portfolio hand you the box, the instructions and a wrench - the aching back comes at no extra charge. At GoodStream, our insight is that we deliver you a fully built chair. And it's a better chair than you'd build yourself, because every piece of data is validated and verified.
I want to be specific about what validated and verified means, because every vendor says it. We run a separate extraction agent for every field, more than one model reads each one, and if they disagree, a person on our team opens the source page and decides which one is right before the number goes in. Every number links back to its page, so when a partner or an auditor asks where it came from, you click on it and the page opens.
It's also built from the executed documents themselves, the financing documents, the charter and the cap table, plus the side letters and the notes, rather than from what somebody typed into a system after the fact.
No DIY required
Back to our fund CFO. She now connects GoodStream to her documents once - no DIY required. We automatically read, understand, extract and associate all of her data and documents, and she gets the full preference stack and waterfall for every company in her portfolio - updated every time a new deal closes.
None of this means throwing out the systems a fund already runs on. Most of the funds we work with keep their fund admin and their cap table software. What changes is that the fund isn't the one doing the assembly anymore.
Are you a fund CFO that is sick of the back-ache and extra screws? Ping me and you'll be enjoying your comfy, fully built, auto-updating chair before you know it.
