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How does Passthrough plan to automate fund management and improve margins using technology?

Tim Flannery

Co-founder & CEO at Passthrough

I think we're trying to avoid the problem of this almost altogether. We recognize this needs to be a white-glove service because a manager is bringing their investor relationships to the table, and they're bringing all of their investor data with them. It needs to be a secure platform, and it needs to be something where an investor feels like they're being treated like an investor instead of being treated like a user. From our business model perspective, that means that we need the staff on the support and customer success side.

What we've avoided largely is building out these deep, operational teams to help you with the day-to-day of how you're running your fund. There are a couple of reasons for that. 

One is that those are, as you pointed out, difficult to automate away. First, it's a tough technical challenge. 

The second is that when you start to encroach on that, then you start losing the ability to be a platform, and you start becoming more of a service provider. Our aim is to be a platform that's agnostic to whatever tools or whatever teams that you have. We have no interest in becoming a service provider. Our goal is to go enable teams and take manual work off of their plate.

Really what we do is we build these very efficient workflows and combine them with this concept of a cross-platform identity. The fastest we've had somebody complete a subscription is six minutes from scratch. That's a pretty big win. That's with them filling everything out. 

If we can take the information that we've already collected and repurpose it across the context of a subscription document, then we can repurpose it across all these other places, and you have data that you know is already good, that you're just reapplying.

Once there's that trust in the data, and once you have these strong workflows to make sure that the data gets into the right places, then that by default takes a lot of the manual work that needs to happen out of it. 

The other thing is that, in my experience building operations teams, you've got very deep, vertical problems and you have very wide horizontal problems. One of the things that can be difficult about scaling a business with horizontal problems is that there's always something new to go build that doesn't have this additive effect over time.

On the other hand there's something like fund closing, which is a deep vertical problem. Every time we automate a piece of it, we’re just getting more and more leverage on this one very specific thing. Our approach is first, let's just do that, and let's get this to be as integrated a process as we can to allow people to do this deep coordination that needs to occur. That coordination is very different when it's focused on the accomplishment of this task, as opposed to a series of tasks that are broadly related to your back office, which is kind of where we play, in the back office.

Find this answer in Tim Flannery, co-founder of Passthrough, on building TurboTax for private fund investing
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