Podcast Summary:

Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
Episode: DealsPlus' Venkat Subramaniam – Building a Single Source of Truth for Private Markets
Date: January 16, 2025
Host: Michael Sidgmore
Guest: Venkat Subramaniam, Co-Founder of DealsPlus

Episode Overview

In this insightful episode, Michael Sidgmore sits down with Venkat Subramaniam, Co-Founder of DealsPlus, to discuss the evolution of private market infrastructure—focusing on the challenges and innovations in back-office software for private equity (PE) firms. The discussion highlights why a “single source of truth” is critical for managing complex fund structures, the persistent reliance on Excel, the importance of bringing transparency and process automation to private markets, and how next-generation software solutions are transforming the industry’s operational backbone.

Key Discussion Points & Insights

1. Venkat’s Background & The Genesis of DealsPlus

Timestamps: 03:34–05:09

• Venkat’s experience: Venkat started as a tax advisor, focusing on structuring and diligence for PE transactions. He noticed the inefficiency and risk in manual, Excel-based CAP table and transaction tracking.
• The “war stories”: Transactions were often delayed or complicated due to inaccurate or outdated data across teams, sometimes leading to billion-pound misconceptions in projected returns.
  • Quote:

    “…what was being projected in an Excel file was way off the reality because some of the instruments were not being accrued or the terms were different or the dates of accruals are different and it’s off by a few billions of pounds…”
    — Venkat (05:26)

• Pain point: Despite the sophistication and assets managed by PE, there was a glaring lack of reliable tech solutions for process management.

2. State of Technology in Private Markets

Timestamps: 06:25–09:04

• Excel’s limitations: While Excel is excellent for modeling and scenario analysis, it’s inadequate for dynamic data tracking and workflow management.
  • Quote:

    “Excel is great…if you’re modeling scenarios… What it’s not good with is if you’re trying to track events, you’re trying to manage workflows, and when Excel is being used for that, that is where it sort of falters.”
    — Venkat (09:04)

• Industry “catching up”: Digital transformation is accelerating due to advances in cloud computing and better UI/UX design, driving adoption of modern solutions.

3. The Role and Importance of a “Single Source of Truth”

Timestamps: 10:04–12:43

• Why it matters: CAP table data underpins everything from KYC checks to quarterly valuations and investor relations; yet, silos mean data is fragmented and often unreliable.
• The “messy middle”: Most tech solutions cover investor communication or fund accounting, but the “messy middle” — the complex relationship between fund and portfolio companies — is often ignored.
  • Quote:

    “There is this messy middle between the fund and portfolio companies. There is complexity in this data set because these things are highly structured. There’s lots of moving parts… and there’s volume.” — Venkat (12:57)

4. Why Private Equity Needs Its Own Digital Solutions

Timestamps: 14:32–16:36

• Venture vs. PE: Tools like Carta have succeeded in VC, but PE’s complexity (multiple entities, jurisdictions, currencies, instruments) requires a fundamentally different approach.
• Integration needs: PE cap tables need to connect legal entities, structure charts, debt instruments, and complex waterfalls for valuations.

5. Stakeholder Management and Collaboration

Timestamps: 17:06–18:49

• Many players: Fund finance, deal teams, portfolio companies, and advisors each keep their own data—often leading to discrepancies.
• Software’s edge: Well-designed platforms enable centralization, access controls, and real-time collaboration, reducing friction and errors.
  • Quote:

    “…you can bring all those players together… grant access to valuation teams, deal teams, portfolio companies, CFOs… So software makes a huge difference.”
    — Venkat (17:06)

6. Quantifiable Impact: Time and Cost Savings

Timestamps: 18:53–20:13

• Time wasted: Mid-market funds can lose 1000+ hours annually retrieving and reconciling basic transaction and cap table information.
• Hidden costs: Delays impact decision-makers and increase advisor fees, particularly during exits when stakes are highest.

7. The Industry Trend: Best-in-Class Point Solutions

Timestamps: 20:47–23:33

• No one-size-fits-all: Given the complexity of each process (originations, investor relations, portfolio monitoring), best-in-class “point solutions” are favored, connected via APIs and data warehouses.
• Integration: Data lakes/cubes enable overall visibility while letting each software do what it does best.

8. Complexity & Fund Size

Timestamps: 23:33–26:05

• Product vs. process: The complexity of deals is often similar between small and large funds; what changes is the people and stakeholder management, not necessarily the product requirements.
• Adoption: Smaller funds benefit more quickly from digital solutions due to more concentrated decision-making and fewer behavioral hurdles.
  • Quote:

    “…the clients who benefit from technology, who get the return quickly, are people who already have a degree of processes in place. They may not have technology, but they have a process.”
    — Venkat (26:05)

9. Network Effects in Platform Adoption

Timestamps: 27:09–28:44

• Upstream and downstream gains: As companies move across owners, using standardized platforms like DealsPlus streamlines diligence and transitions, driving industry-wide adoption via visible efficiency gains.
• Portfolio management: Buy-side and sell-side both benefit from clean, transferable data.

10. Standout Features: Waterfall Calculation

Timestamps: 28:54–29:52

• “Wow” moment: Instant, accurate waterfall calculations — tracing enterprise and equity value through all stakeholder layers based on accurate cap table data — is a major value driver for CFOs and deal teams.
• Processing complexity: Automates complex tasks like valuing preference shares and loan notes, especially prevalent in European PE structures.

11. Trends Shaping the Future: Private Debt, Regular Valuations, & Transparency

Timestamps: 29:52–32:48

• Market context: Direct lending and evergreen fund structures require real-time, regular (often quarterly) and highly accurate valuations.
• Stakeholder alignment: Complex ownership structures require constant, proactive communication with management and co-investors.
• Transparency: Centralized data, workflow, and document proofing build investor confidence in the wealth channel.
  • Quote:

    “Just having that single source and being able to connect transactions, underlying transaction events with the… proof… that data flowing into all deliverables… that is where the transparency comes from.”
    — Venkat (32:04)

12. Hardest Problems Left to Solve

Timestamps: 33:06–34:15

• Data to insights: Using consolidated deal-level data for fund-level tasks (e.g., carry modeling, K-1s/tax reporting) remains challenging.
• Bottom-up approach: Building from ground-truths at the transaction level unlocks top-down analytics and reporting.

13. Why Bottom-Up Solutions Win

Timestamps: 34:22–36:03

• Practitioner founders: Solving these problems best requires industry practitioners who know the pain deeply, are passionate about it, and are willing to partner with engineers.
  • Quote:

    “You need to understand the problem, but you need to be passionate about the problem. If you don’t have the latter, it becomes very difficult when you’re building…”
    — Venkat (35:05)

14. Similar Problems Across Firms

Timestamps: 36:03–37:41

• Uniform need: All PE funds think their processes are unique, but the same recurring data and valuation pain points exist universally.
• Behavioral change: The biggest driver of digital transformation is process adoption, which scales more easily in smaller firms.

15. The Future: Rapid Transformation

Timestamps: 37:41–39:11

• Acceleration: Rapid digital transformation is here; the next 3–10 years will see a major shift as legacy processes give way to cloud platforms and integrations.
• Industry buy-in: Both technology vendors and asset managers are embracing this change, eager for greater efficiency and transparency.

Notable Quotes & Highlights

• On Excel’s Place:
  “Excel is great… If you need that data to flow into Excel to then model your waterfalls and valuations, that is a great use case. So I think software will help Excel become more powerful and vice versa.”
  — Venkat (09:04)

• On Platform Adoption:
  “The beauty of software is you can bring all those players together… that’s where the power comes in.”
  — Venkat (17:06)

• On Network Effects:
  “Often another PE fund is sold and go, well, wish they had DealsPlus because none of this diligence findings would have happened… So much cost and created efficiencies.”
  — Venkat (27:48)

• On The Future:
  “There’ll be a rapid one happening the next five to ten years. That’s pretty obvious to us now… Even in the next three to five years, things are changing very rapidly.”
  — Venkat (38:13)

• On Digital Transformation:
  “We are moving from the stone age to the digital age. I love it.”
  — Michael Sidgmore (39:11)

Key Timestamps

• [04:05] Venkat’s background and the genesis of DealsPlus
• [05:26] Real-world transaction failures due to data gaps
• [09:04] Where Excel falters and where software excels
• [12:43] The importance of the “messy middle” in PE workflows
• [14:32] Why PE cap tables are harder than VC
• [17:06] Enabling multi-stakeholder collaboration with platforms
• [18:53] Quantifying time/cost savings from digital adoption
• [23:33] Fund size vs. deal complexity and process
• [27:48] Network effects as more firms adopt platforms
• [28:54] The “wow” feature: live waterfall modeling
• [32:04] Transparency for PE investors—roots in reliable digital record-keeping
• [33:06] The last mile: from asset-level data to fund-level insight
• [38:13] Anticipating the next digital leap in private markets

Tone, Energy & Closing Thoughts

The conversation is forward-looking, solution-oriented, and grounded in real practitioner experience. Venkat is passionate but practical, emphasizing the deeply interconnected challenges across private markets and the promise of rapid, meaningful change via targeted software. Michael’s questions reflect a keen, inside-the-industry curiosity driving at both the technological and cultural/operational implications.

For listeners: This episode is an essential primer for investors, fund managers, and professionals considering the realities of digital transformation in private markets—delivering both macro-industry trends and micro-level insight into why “getting the data right” changes everything.