What is a Reusable Investor Wallet and How Does it Make Fund Subscriptions Faster?

A reusable investor wallet might seem like a financial product, but it's actually a database that holds investor information, including identity data and other details about the individual or entity.

In the private market, gathering investor data for the fund subscription process can be tedious and repetitive for investors and fund managers. Outdated data collection methods, such as using Excel sheets or fillable PDFs, are no longer what investors want.

One of our clients, Leonie Klimpke, Cavalry Venture's Director of Finance and Compliance, said, “We have many investors who are digital natives and founders of software companies. They asked us why they had to fill out a PDF document. Why can’t they populate their information online?”

We have many investors who are digital natives and founders of software companies. They asked us why they had to fill out a PDF document. Why can’t they populate their information online?

Leonie Klimpke

Cavalry Venture"s Director of Finance and Compliance

Cavalry Ventures' experience is not unique. Other VCs and PEs are facing similar questions from increasingly tech-savvy investors. Although data collection and verification steps cannot be eliminated from the fund subscription process, streamlining them can provide:

• Faster flow of capital
• Quicker investor onboarding
• Swifter fund closings 

The solution is for the private market to use digital tools. 

5 Minute Fund Subscriptions are Achievable 

Considering fund subscriptions can last weeks and sometimes months, a 5-minute subscription process may sound unrealistic, but it is achievable for repeat investors.

How does Vestlane’s Reusable Investor Wallet work? 

• The investor wallet is a database within the platform that allows LP information to be retained and re-used.
• When investors want to subscribe to a new fund, the platform retrieves their most recent information, eliminating the need to re-enter data or undergo additional identity verification.

This feature streamlines the fund subscription process, reducing the time from weeks to between 5 minutes and 24 hours.  

By converting investors' verified data into fraud-resistant, reusable credentials, our system eliminates the inefficiencies of repeated ID verifications.

Why fund managers love it: 

• Fund managers can quickly onboard investors, allowing them to manage more subscriptions in less time.
• It’s easier to review and retrieve investor data, which reduces the time required to complete fund subscriptions and leads to higher investor satisfaction.
• With a more efficient onboarding process, fund managers can handle a larger number of investors and subscriptions, facilitating growth and scalability for their funds.
• Investor data is stored in a highly secure environment, ensuring compliance with data protection regulations. Confidential information is safeguarded, which builds and maintains investor trust. 

Why investors love it: 

• Investors no longer need to fill out their information for every new fund subscription.
• Many investors are tech-savvy and appreciate platforms that leverage modern technology to simplify and enhance their investment experience. 

The Future of Reusable Data in the Private Market

While reusable identity offers significant benefits, its adoption in private markets is limited due to several challenges:

1. Setting up and maintaining a secure and reliable data infrastructure requires significant investment in technology and expertise. This includes secure servers, encryption, and systems to ensure data integrity and availability.
2. The private market must follow strict data protection regulations like GDPR. Ensuring compliance requires a deep understanding of these regulations and the ability to implement systems that meet all legal requirements, including data encryption, secure storage, and access controls.
3. KYC/AML regulations require thorough verification of investor identities. This adds complexity and requires sophisticated systems to ensure compliance and prevent fraud.

Funds can’t automate these tasks on their own, leading to a clear market need for secure and efficient digital solutions in fund management.

Vestlane is built for funds in the DACH region and across Europe. Our co-founders know the ins and outs of the long fund subscription process. We continually improve our features, like the Reusable Investor Wallet, to ensure we’re collecting and storing investor data efficiently.

We created automated questionnaires that guide investors to the right sections based on their answers. For example, if an investor is an individual, they will only need to provide personal information.

Gabriele Falace

Vestlane Co-Founder & CTO

Vestlane shortens the fund subscription process from weeks or months to less than 24 hours for repeat investors and reduces data entry errors. These improvements enhance overall efficiency for both investors and fund managers, making reusable identity a practical and valuable solution in the private market.

What Investors And Funds Think About The Reusable Investor Wallet  

Over 150 funds, such as HV Capital, Headline, AENU, and Multiple Capital, use Vestlane to manage fund operations and streamline fundraising, fund marketing, and investor onboarding. 

Ertan Can, founder of Multiple Capital, a European fund of funds, said, “Onboarding LPs has always been resource-intensive, especially in Europe. With Vestlane, we've significantly reduced the time and effort involved, allowing us to focus more on finding and investing in high-potential venture funds.” 

Adding to that, Vanessa Brahmi, Managing Director of Finance and Legal at AENU, spoke about her experience on the investor side.

In 2019-2020, I made several VC subscriptions for other funds, and they were all old-fashioned, wet-ink, and paper-based. I walked to the notary. But then, for one fund, I received a link, and I clicked and clicked, and it was all done. This really wowed me; the experience subscribing as an LP was amazing, so when we started our new fund, it was a no-brainer to use Vestlane.

Vanessa Brahmi

Managing Director of Finance and Legal at AENU

In addition to making fund operations easier and faster, we also help funds find the best investment opportunities. Our platform already has over 6000 investors onboarded and accessible to the funds that use Vestlane. 

We want to change how investors subscribe to funds by making the process faster and easier with:

1. Central Data Storage: All investor information is stored in one place, serving as a single source of truth. Investors do not need to fill out their details again for each new investment, saving time and effort.
2. Accurate Data: Reusable data reduces the risk of errors that can occur with repeated data entry, ensuring consistent and accurate information.
3. Secure Servers: Our systems are built to ensure high availability and strict adherence to SLAs, providing a reliable environment for storing investor data. All data and documents are encrypted both in transit and at rest, ensuring maximum security.
4. Better Experience for Investors: Investors have a smooth and easy experience. With their information already saved, they can join new investments quickly without extra paperwork.
5. Automatic Updates: If investors need to change their information, like a new address, Vestlane informs all the funds that use that investor’s data. This keeps all information correct and shared across all investments.

Cost and ROI of Reusable Data

The cost of using the Reusable Investor Wallet varies based on the number of investors and specific fund requirements. We support both digital-first and established funds with tailored solutions. 

To give you an estimate of the savings you can achieve from reusable investor data: 

1. Reduced Administrative Tasks:

• Estimate the current time spent on manual onboarding per investor
• Calculate the hourly wage of administrative staff
• Multiply the hours by the hourly wage and the number of investors

Example:

• Current time per investor: 10 hours
• Hourly wage: €50/hour
• Number of investors: 150

Current Cost: €75,000

With Vestlane:

• Your automated onboarding will be reduced by at least 50%.
• New time per investor (according to the example above): 5 hours

New Cost: €37,500

Total Savings: €37,500

2. Faster Subscription Processes:

• Estimate the difference between investor onboarding times and fund subscription processes when using a digital platform and when doing it manually
• Calculate the financial impact of this difference

Example:

• Original onboarding time: 3 months

With Vestlane:

• New onboarding time (according to the example above): 1 month

Potential Savings/Earnings: €200,000 

By reducing the onboarding time from three months to one month, funds can access committed capital sooner. This allows them to make early investments in promising opportunities, which can generate returns more quickly. 

For instance, investing in a high-potential venture earlier can result in significant gains due to market timing advantages, compounding growth, or early entry benefits. 

3. Enhanced Investor Satisfaction:

• Estimate the increase in investor retention and new investor referrals due to the improved onboarding experience
• Assign a monetary value to each retained or referred investor

Example:

• Retained investors: 10
• Value per investor: €100,000

With Vestlane:

• Value from Retained Investors (according to the example above):  €1,000,000

Total ROI Calculation

(This is an estimate based on these three factors and examples mentioned above)

• Administrative Savings: €37,500
• Gains from Faster Closing: €200,000
• Value from Retained Investors: €1,000,000

Total ROI: €1,237,500

With the Reusable Investor Wallet, funds can expect significant cost savings and enhanced efficiency, leading to a substantial return on investment.

Of course, more than the monetary savings, the positive relationships built between funds and investors is the real gain. These relationships are crucial for long-term success and investor satisfaction. 

Book a demo to learn more about how you can use Vestlane and get access to over 6000 investors who have already been onboarded to our platform.