Private equity deals are highly structured, with ownership spread across funds, management teams, and co-investors. Having a clear and accurate view of ownership structures and cap tables across portfolio companies is crucial. Unfortunately, most PE funds—except those using DealsPlus—struggle with this visibility, leading to significant inefficiencies that ultimately erode fund returns.
Based on our research, where we have mapped the investment structure data and related workflows, we estimate that current inefficiencies cost PE funds at least 500+ hours per portfolio investment annually. This time drain increases the cost of key workflows across accounting, valuation, legal, tax, and transactions.
The Problem
Currently, managing cap tables in private equity typically involves:
- Multiple Excel Files: Each portfolio company has its own spreadsheet, making data hard to standardize, maintain, and validate.
- Lack of Real-Time Visibility: Funds, management, and co-investors often lack a clear view of ownership stakes at any given time.
- Valuation Challenges: Multiple Excel files and fragmented ownership data complicate equity valuation, making quarterly reports, audits, and exits time-consuming and cumbersome.
- Accounting and Audits: Ownership data is required for fund and portfolio accounting and audits. However, this data is not structured, validated, or tracked in a standardized way for these processes.
- Legal compliance: Fund and portfolio legal teams struggle with accessing accurate share registers, structure charts, documentation, and KYC confirmations, often due to the absence of a single source of truth on cap tables and holding structures.
- Tax Risks: Lack of visibility into structural events means tax risks are often identified too late, eroding portfolio value.
- Transaction Readiness: Our research indicates that it takes an average of 6-8 weeks to get a portfolio transaction-ready for legal, tax, and corporate due diligence. Diligence findings that impact value are common.
The Solution
DealsPlus offers a streamlined solution tailored for Private Equity structures:
- Single Source of Truth: DealsPlus creates a Single Source of Truth by digitizing all portfolio cap tables and structures into one reliable platform, no matter how complex they are.
- Stay Up-to-Date: Maintain current, accurate cap table and investment structure data effortlessly.
- Value Maximization: Leverage accurate data for better accounting, valuations, legal governance, tax planning, and transaction management.
By implementing DealsPlus, PE funds can drastically reduce inefficiencies, save time, and ultimately improve their IRR.
To see how 40+ funds, sponsored by well-known GPs, are benefiting from DealsPlus, schedule a demo today at demo@dealsplus.io.