Maximizing venture capital fund returns in today’s environment requires managers to partner with trusted business advisors to achieve operational excellence, thus enabling them to focus on deal flows and portfolios.
We’ve outlined how our venture capital administration consultants’ capabilities can provide fund managers with quality solutions to venture capital fund accounting and operations.
Things to know about VC Administration consultants:
- What is Venture Capital (VC) Administration?
- What does a VC Administration consultant or team of consultants do?
- What are the benefits of hiring a VC Administration consultant or team?
- When should you hire a VC Administration consultant or team?
What is Venture Capital (VC) Administration?
Venture capital administration is the process of managing and overseeing a venture capital fund (re: a type of private equity investment that focuses on providing capital to emerging companies with a high potential for growth).
Venture capital administration includes activities such as accounting and financial reporting, investor onboarding and communications, treasury and vendor management, financial planning and analysis and liaising with third-party accounting. Our consultants are well versed in these areas, having effectively and efficiently performed these functions for many funds of various sizes, structures, and strategies.
Common VC Administration activities:
- CFO Advisory: Providing support for your fund’s achievement of long-term financial goals and achievement of short and medium-term projects in accounting, financial planning and analysis and capital fundraising.
- Budgeting & Forecasting: Managing risk by creating budgets, providing financial forecasts and reworking processes as needed to plan for future growth and success.
- Invoicing, Filing & Payroll Management: Managing invoices for accounts payable, 1099 filings and payroll processing.
- Financial & LP Reporting: Developing recurring and ad hoc financial reports, balance sheets, income statements, cash flow statements, performance analytics and Partner capital account statements (PCAPs), to provide accurate and reliable performance insights to investors.
- Investor Communications: Communicating and collaborating with investors and external partners on capital call and distribution notices, tax reporting (e.g., distributions of Schedules K-1), periodic investor updates, and audited financial statements.
- Fund Audit & Tax Reports: Managing and reviewing tax forms, overseeing financial statement audit processes and addressing audit issues.
- Tax Consultation: Providing guidance for tax structures and ensuring accuracy and efficiency to minimize payments.
- Management Company Support: Provide services to support management companies such as cash management, payroll processing, invoice payment, and budgeting.
What does a VC Administration consultant or team of consultants do?
VC administration consultants or teams will guide the success of your fund by providing a deep understanding of finance and accounting and working with industry specialists to ensure compliance with legal and regulatory requirements.
VC administration teams commonly include experienced individuals such as accountants, industry specialists, prior CFOs and many other types of experts who are there to add more value to your fund.
VC administration consultants or teams handle communication with accounting firms, investors and other relevant stakeholders to ensure key project deadlines are effectively met.
Skills & duties of VC Administration consultants or teams:
- Executing day-to-day finance and accounting activities.
- Working with attorneys and specialists in identifying risks and ensuring compliance with laws, regulations, standards and best practices.
- Supporting and tracking the progress of your fund to ensure goals are effectively met.
- Reviewing processes and investment-related procedures to support growth and scalability.
- In the event of a dissolution, supporting your firm through liquidation or the final distribution phase to ensure key deadlines are met and all processes are adequately terminated.
What are the benefits of hiring a VC Administration consultant or team?
- Provides more time for leadership to focus on sourcing deals, managing portfolios and raising capital.
- Drives successful collaboration with investors.
- Provides more control and insight over the performance of your fund and investments.
- Leads to a reduction in risk as compliance with laws, regulations, standards and best practices is established.
When should you hire a VC Administration consultant or team?
If you are struggling to meet your commitments towards investors with the current team structure (in house or outsourced), it might be a sign to consider hiring a Kranz VC administration consultant or team.
The right VC administration consultants will work closely with your organization to identify issues or areas of improvement within your fund-related procedures in accounting, finance and reporting, eliminate compliance challenges and ensure you’re achieving fund operational excellence, allowing for the future growth of your fund.
Signs it’s time to hire a VC Administration consultant:
- You’re experiencing issues with providing timely and accurate reporting to investors.
- You need assistance in coordinating with accounting firms for timely completion of audits of financial statements or tax reporting and compliance.
- You’re having trouble driving successful collaboration across teams or with investors and stakeholders.
- You need to ensure compliance with accounting standards, laws and regulations but don’t know where to start.
- You’re having difficulty developing a long-term strategic plan for your fund.
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