Over the past 7 years, the Atlas portfolio and investor network has grown exponentially. What started as an intimate group of friends and family, has ballooned to a robust network of 400+ individual high-net-worth investors.
Over time, the administrative burden of managing 1,200+ investor positions across 30+ deals making quarterly distributions became overwhelming.
Here’s what our quarterly reporting process looked like:
- Draft a 3-5 page quarterly summary for each deal in MS Word, plug in an income statement in Excel, convert the document to PDF, and email to each investor through Outlook.
- Update our capital accounts and distributions spreadsheet in Excel which calculates the distribution amount for each investor. Send a separate email to each investor with the quarterly distribution amount and annualized yield.
If you were an investor in 20 deals, you’d get 40 emails from us each quarter! It was crazy, but there was no easier way. Investors would inevitably respond with questions on the deal or requests for previous quarterly letters. This back & forth would take up a significant amount of time.
The K-1 tax document distribution process was equally cumbersome. We’d password protect each K-1, then send the document in one email and password in a separate email. Your inbox would be flooded by emails from Atlas. The document was also being sent insecurely via email, which is not a best practice.
Our capital raising process was a mix of emails, PDF’s, printing & scanning, and tracking everything on the back-end in Excel. It was crazy that in 2016 this is how we, and most of the private real estate world, operated.
Each of these aspects of our business were cumbersome, they weren’t scalable, and it wasn’t a great experience for our investors.
We began looking for a solution in 2014. Crowdfunding was brand new, but we thought we could piggy-back off the software these companies were developing to manage 1,000’s of investors.
As we demo’d various software solutions, we had 3 main criteria in mind:
- Create a great experience for our investors.
- Make our reporting and capital raising process more efficient and scalable.
- Find a team we’re comfortable partnering with for the long-term.
Over the next 24-months, we tested every software imaginable including tools built for real estate, private equity, and hedge funds. Nothing met our criteria. Either the software was not built for the real estate industry and/or didn’t have the depth we needed. As we tested each solution, we became very good at understanding fact from fiction. As a real estate investment company, we are always going to be less knowledge about the software than the vendor that built it, but we were able to develop a discerning eye to separate the marketing fluff from reality. One thing we learned is that there is a lot of marketing fluff out there. Sadly, there is no way to know it other than to leverage the knowledge of those of us who have learned the hard way before you. At one point, we even started to build our own software, utilizing the tools built for the crowdfunding industry and customizing it to meet our needs. We quickly realized why we are in the real estate business and not in the software business!
By late 2016, we decided to put the project on hold. We faced reality; we weren’t comfortable with any of the tools that existed today yet the burden of managing our investor relationships continued.
However, in early 2017 that all changed. A friend of ours introduced us to Juniper Square, a purpose-built real estate investor management software solution which had been around since 2014 but focused on quietly growing via referrals vs doing a lot of mass marketing. By the time we connected with Juniper Square, it was clear some of the nations’ leading sponsors had already trusted them with their investors and now it was up to us to see if they were also a good fit for Atlas.
Several demo’s and calls with references later, and we were hooked! We signed up in late February and told the Juniper team we needed to be live in 3-4 weeks, in time for our 2016 K-1 distribution.
The Juniper team stepped up to meet a really aggressive launch schedule, and we’re glad they did. In total they on-boarded 1,200+ investors, 30+ deals in less than 30 days. If you have ever done a software migration, you know this type of timeline is unheard of. The industry average if 6-8 months and many firms try to hook you with what they call “quick wins” meaning they deploy a part of the solution so you are committed but then drag out the full implementation.
When the Juniper Square team told us they would try, we too were a bit skeptical and we under wrote a much longer migration. But the Juniper Square team delivered and exceeded our expectations. One thing we really appreciated during the process was their transparency. They didn’t over promise and under deliver, rather they approach our relationship as a partnership and clearly communicated with us along the way. Since launching, we have received incredible feedback from Atlas investors, and we’re eager to scale our business using Juniper Square software and alongside their great team that supports us.
In this post I invite Co-founder and CEO, Alex Robinson, and Managing Director of Business Development, Brandon Sedloff, to tell us about the background of the company, some of the features that make it unique, and where they plan to take Juniper Square going forward.
Tell us a bit about your background and how you came up with the idea for Juniper.
I’ve spent my entire career in the tech industry, though I’ve always had a side passion for real estate and enjoyed investing in real estate as an LP.
Back in the summer of 2013, we had just sold my previous tech company and I was spending my time investing in real estate with various friends who were GPs. It was a great time to be investing in the asset class, so I was working hard to meet new managers in geographies I was excited about.
As I got to know more and more investment firms, I kept seeing the same pattern: every real estate firm, large and small, was running their investments business on spreadsheets. I was shocked to see this given the size of the industry (literally a multi-trillion dollar capital market).
Furthermore, as an investor, I was coming to real estate expecting the same kinds of web tools that were available to me in public markets investing. But real estate was like stepping back in time 20 years when it came to reporting. Everything was done via paper, the investor web interface–if any–was essentially a glorified FTP site for documents, and the information security practices terrified me, given how much sensitive personal information I shared with the managers.
I knew there had to be a better way. So in February 2014 I teamed up with two friends who were the smartest technical people I knew, and we started Juniper Square. Since then, we’ve been hard at work building that modern investor interface that I wanted as an investor, and the streamlined investment management system that I knew managers desperately needed.
What were the biggest challenges in building the product and penetrating the real estate business?
With a product like ours, which stores highly sensitive information like social security numbers and investor banking details, one of the biggest challenges to surmount early on was establishing trust. With our kind of software, it’s not like we can just slap together an app and throw it up on the app store, and walk away if it doesn’t work. Our customers are trusting us to be good stewards of their data, and long-term partners to their businesses.
To address this, we started the company in a bit of an unusual way. For the first nearly three years of the company’s life, we did no marketing whatsoever. As in, we didn’t even have a website!
We weren’t focused on marketing because we were 100% focused on building a great product. When our early customers saw our dedication to learning their business — literally we became embedded with some of them as we built the software — it helped to establish trust, and they in turn referred us to other customers. So we were growing, but only by the sincere and genuine recommendations of our early users. Through that process we have now been fortunate to earn the trust of some of the biggest and best known investment managers in real estate. And now happy to report that we have a website. 🙂
What surprised you most about the real estate business?
How information-intensive it is. A lot of people don’t know this, but in other asset classes within the alternatives industry, investors aren’t accustomed to getting detailed data on assets. It’s not uncommon to get a quarterly letter from a hedge fund, and that’s it. In real estate, on the other hand, it’s not uncommon for investors to ask for details on leases! There’s just a level of information intensity that is really unique to real estate, yet at the same time most firms aren’t run like tech firms in the way that hedge funds are. So there’s this asymmetry: tons of data available, few firms truly taking advantage of it.
Where do you see Juniper in 10 years?
If we’re doing our job, then by using our software managers are going to be free to focus on what they do best: investing in real estate. Back office pains are going to be a thing of the past. And investors are going to have the same powerful tools that exist in public markets, but for private funds. We think that we are at the very beginning of a huge wave of innovation coming to the private funds world, and we think the key to it all, ironically, is replacing one of the products I used to work on in my previous life at Microsoft: Excel.
What are some of the features that separate Juniper from the competition?
Juniper Square is the only real estate investment management software that was built specifically for real estate reporting and can support the range of needs from entrepreneurial syndicator through to institutional fund manager. Because we didn’t evolve out of another business, we had no encumbrances around how we design the software.
When customers switch from other service providers, the most common feedback we hear is how much easier our software is to use and how intuitive it is. This is deliberate and a result of having an exceptional team of engineers who can do all the hard work behind the scenes so the customer gets a tool to use that works out of the box. One of the tricky things for anyone buying software for the first time is that they may not know the right questions to ask.
Additionally, it’s very hard to separate marketing “fluff” and product feature checklists from actual functionality. The reality is that you won’t know the flaws of any software until you start using it. That is why it’s critical to ask any vendor for references as software vendors will show you what works vs. highlight the gaps. Don’t fall for the marketing.
In terms of product features, one of the most used features in addition to the accounting and reporting is an integrated CRM with email integration. There is nothing that investors hate more than receiving an auto-generated email that says “a document is ready” when they have no way of knowing if it’s an important document or a press release.
This sounds minor, but compound this over every email requesting capital to fund your deals or communicating a distribution and this can not only become annoying, it’s easy for critical info to be missed. Speaking of missing info, the email integration helps ensure emails are delivered from you directly to the inbox of your investors. If you are forced to use an outside email software like mailchimp, you risk your email going to spam. That is critical when it comes to communicating you need capital or have capital to distribute.
Lastly, given that we were purpose built for real estate capital raising, investor reporting and investment accounting we are the only software provider that can provide a truly end to end solution for an investment manager with $5M in investor equity or $15bn in investor equity. For many of our customers, the ability to have a truly institutional grade platform that can be scaled back to meet the needs of a manager much smaller is a good investment.
What’s the most common question you get from potential users? In other words, what kind of resistance do you get?
There are three things we here over and over.
First, good software is expensive. Like anything else, you get what you pay for. If a vendor lets you beat them up on price, there is a reason. We are very fortunate that 90% of our business is inbound and comes from referrals from happy customers. That said, there are some people who are not yet ready to pay for good software.
Second is a timing issue. Most of our smaller customers run very lean teams and like everything else, making a decision requires focus. The good news with how we work is we do all the heavy lifting to migrate the data. This is stuff no real estate developer/investment manager wants to do so we take the burden off their back. To give some perspective, our average time from the time we have the customers’ data to deploying Juniper Square is 23 days. I’d doubt that we can be beat in this category.
Lastly, if someone has a system that is just “good enough” it’s hard to get them to rip and replace. It really comes down to timing and willingness to change providers.
What’s the common feedback you get from users once they implement Juniper?
In addition to “wow”, the feedback we hear most often is that the software is intuitive and maps to the way they are used to moving through the capital raising, investor reporting and investment accounting process but helps them do it faster, better and with less room for mistakes. Additionally, customers tell us their investors love it.
At the end of the day, if a manager can strength their relationship with an investor, that is a very critical piece of the equation. For our customers with smaller investor checks, they tell us we have helped them unlock capacity. For many of our customers, access to capital and deals are not the problems, the problem is the administrative burden of reporting. With Juniper Square, this problem is gone as the system can help managers use technology to automate repeatable tasks and thus scale their business.
Juniper Square has completely changed our view of the real estate syndication business. Being able to access flexible capital from a pool of HNW investors is our competitive advantage. Knowing we have the tool to do it efficiently provides us with the comfort we need to keep scaling our deal flow and investor base without the burden of scaling headcount to meet our evolving needs.