Do I need an investor portal software?
If you are a small alternative investment company, it’s a fair question to ask whether you really need an investor portal software or whether the way you’ve been doing things is good enough.
The answer is different for everybody, but most small investment firms can’t go wrong with an investor portal that gets the basics right. A really user friendly portal will delight your investors, bring your more repeat investors, and reduce the minutia in managing your business.
Below, we’ll discuss some of the most common features and use cases for using an investor portal.
What is investor portal software?
Investor portal solutions are a great way for small investment firms to provide an institutional quality to their investors without breaking the bank.
Most investor reports offer a secure document management system to share K1s and subscription documents with investors as well as some level of investor reporting.
Investor portals are common to multiple industries serving both private and public investments but this article will focus on private investor portals.
What types of firms use investor portals software?
Here are some of the industries that use investor portals in the world of private investing:
- Real Estate Syndicators
- Fund Managers
- Private Equity & Venture Capital Firms
- Family Offices
- Hedge Funds
What are some common features in investor portals?
Since some investor portal software solutions focus solely on the LP experience and others include functionality for managing an investment firm’s back office, the features can vary pretty broadly.
Front Office Features (LP Portal)
Secure Document Storage
Investor’s need access to subscription documents, investment reports and summaries of new opportunities, previous and current K1s, and more. Managing these through a service like Dropbox can work at the start, but an investor portal software is sure to increase a firm’s professionalism and make it easier for GPs to manage their investors.
Investment Performance Reporting
Investors want to know if their investment is performing well and want to be able to see everything at a glance. Even a simple portal can allow you to show investors performance calculations like ROI, Projected IRR, Preferred Returns, Capital Balance, and more.
New Deal Marketing and Fundraising
Market your new deal to past investors and new prospects and provide them with a streamlined subscription process from soft commit to e-signing subscription documents and funding.
Secure Bank Account Management
Investors who receive regular distributions or payment can securely store and update their bank account information in a portal. The GP will have a record of all bank accounts and an audit log of all updates. Some portals also allow for direct ACH payout for distributions or loan payments.
KYC / AML Compliance
Certain investor portal solutions have the ability to collect and verify the identity of an LP before accepting investments, helping firms to stay FINRA compliant.
Wire Fraud Prevention
Wire fraud is the most common type of fraud investment companies are subject to, and having a secure investment portal makes sure you don’t have to send wiring instructions over email and risk compromise.
An important, and often overlooked, feature of a small company offering a web based investor portal solution is increasing the level of credibility the GP in the eyes of the LP. With so many private investment firms still handling things with spreadsheets and email, offering a white-labeled investor portal can help GPs stand out among their competition.
Back Office Features (GP)
Whether you’re crowdfunding or raising capital from private investors, your fundraising process can be automated from creating a landing pages to collecting commitments, signing documents, and accepting payments. And as a GP, you can easily manage everything without the need for spreadsheets.
Automate your distribution waterfalls to the click of a button. Optionally generate investor statements and send direct payments to their bank accounts.
A centralized investor CRM can allow you to see all of an investor’s transactions, investment profiles, and history in one place, while also allowing you to keep track of your interactions and notes on the investor.
Central Document Management
Referring Partner Management
KYC / AML Compliance
How much does an investor portal cost?
Investor portals can have a wide array of costs depending on features.
Below are some broad expectations when looking at a custom solution vs. an off the shelf solution (one of ours or another).
Up Front Cost (Off The Shelf)
Most investor portals charge a one time setup fee ranging from $1,500-$5k along with service charges for loading in your previous deals and data.
Investor Deal Room charges a one time setup fee of $2,500 for our off-the-shelf solution that includes on-boarding of up to 5 previous deals. See more about our pricing here.
Up Front Cost (Custom Portal)
If you’re looking for a more bespoke solution prices will vary widely with functionality, but you can generally expect to pay at least $15k and as high as $100k for a custom portal.
Custom portal development will typically start at a bare minimum of $10k from a regular development company, though you’ll pay a premium for a company that specializes in FinTech or investor portals.
Since we specialize in investor portals we’ve been able to build a toolbox for development that make sure we are able to keep costs low and work quickly. As a result, we’ve been able to build simple portals for as little as $5,000.
Here are some broad examples of our custom portal pricing:
- Simple LP Document Portal – $5k
- Document portal with investment amounts and distributions – $10k
- Full LP portal with new deal subscription, KYC / AML verification, Docusign integration – $25-50k
Maintenance on an investor portal can vary as well, but you should be very wary of skimming on this or just vying for the cheapest option.
Your investor’s sensitive data is at risk and the license fee is what keeps the development team focused on updating your portal and making sure your investor’s data stays safe.
Annual license fees for custom portals often start at $10,000/year.
Our annual license fees range from $3k/year to $10k/year.
Additional costs vary from project to project, but the big ones usually include costs for DocuSign integrations, KCY / AML support, and direct payment costs.
Most investor portal vendors will include these in the project scope if you’re building a custom portal. Off the shelf solutions might include these as one-off costs ($1 per KYC verification or $5 per ACH transfer) or include them in the licensing cost.
Some portal development companies offer email-only support and others offer phone and video chat support.
Some portals also offer direct investor support when needed.
Make sure to ask if your license fees cover support and what level of support you can expect to receive.
All our portals are supported by our full time support team through email and phone. We are always happy to hop on a video call as well to discuss a problem or offer training.
Our SAAS Solution
Our subscription based investor portal software solution helps keep costs low by proving a lot of features that would have to be payed for separately using a custom portal solution.
You can visit our investor portal pricing page to learn more about our SAAS solution or schedule a time below to discuss a custom investor portal solution.