Admin involvement - Club Deal 101
The Club Manager has strong obligations and responsibilities and is essential to the success of a Club Deal.
They’re the guarantor of clear and transparent communication to prevent any conflict of interest. They’re the ones who track and gather investors’ interests and commitments in various deals and they’re responsible for the upkeep of an active community of investors.
Also crucial to their role is the necessity to close deals under important time constraints. Our most active clubs have allocations open for less than two weeks. In that tight timeframe, each investor must analyze the opportunity, decide whether they want to invest and if so the specific amount they will commit.
The eClub way
At eFounders, deals are usually presented in a very short timeframe. And so, to create a sense of urgency in investors and make sure that they don’t miss a deal, we’ve come up with a two-step deal communication plan:
- An invitation is sent via Zenvest to access the deal in preview mode, allowing each relevant investor to assess the opportunity. The preview mode end is displayed.
- When the deal is opened for commitment, each investor that has expressed their interest will be able to commit. Based on the “interest score” of each investor (a rate based on the behavior of the investor on the deal), eClub might do direct follow-ups with investor to collect their final decision.
The main idea is to collect investors’ decisions as quickly as possible, without over-selling the opportunity. It must remain the investor’s choice to commit, based on their own analysis.
Collective intelligence
Other Club Managers encourage peer-to-peer knowledge sharing: the ability to interact and learn from other members of the Club Deal you belong to. Let’s say an opportunity opens in an area you’re not familiar with and an investor in your community has this specific expertise. You might benefit from consulting with this particular investor to inform your decisions better. And vice versa, when you are the one with the expertise that’s currently in demand.
It’s a mutually beneficial method for investors and makes the Club Manager’s job easier because it increases interactions between the community members. Conscious of those benefits, we’ve added a simple social layer in Zenvest. It allows investors to follow one another so that they can learn from each other’s investment behavior and patterns. They also get notified if an expert on the opportunity filed commits (cf below the Social Layer in Zenvest) — a pretty convenient feature!
Keeping an active community of investors is key, whether that be through creating a sense of urgency or by promoting interactions between members. But the overarching goal of a Club Manager must remain transparency. It trumps all and is key to building success.
Previously:
- Introduction to Club Deal
- A limited number of targeted & active investors
- Clear and transparent opportunities
Next week:
In the meantime, if you’d like to find out more about zenvest.com, please contact me at cyril@zenvest.com
