Compliance Tech is here to stay - 5 REASONS why Automating Paperwork Is A Boon And Not A Bane
Picture this: A promising Start-up bags a big investment. What follows is heaps of paperwork and tight deadlines to be met (pre-Investment and post Investment) before money hits your bank account.
Year 2010 – Scene at the legal/ paralegal/ chartered secretaries’ office?
The whole team crunch hours into drafting>> reviewing>> editing every single document to support the pre-funding/ post funding requirements.
Let’s translate this into some numbers,
Company (mostly the start-up) needs to cough up a portion of the investment to meet the higher time cost of professionals mostly spending time on documenting the process.
Fast-forward >> Year 2018
Investor requirements for the funding rounds remaining the same,
The drafting>> reviewing>> editing every single document to support the pre-funding/ post funding requirements is now largely automated. This reduces the time cost involved in drafting/ preparing the paperwork. This also means – the team of specialists can now focus on providing core consulting rather than worrying about the mundane “crunch-work “that’s unproductive. Using the right technology, the team streamlines paperwork and core focus shifts to completion.
Yes, you’ll incur the costs of subscription, but there is considerable savings on ancillary cost associated with drafting documents from there on.
Being a Chartered Secretary with over a decade of work experience handling funding rounds for various start-ups, I can share my pain points with conviction. The drafting of papers for pre-investment / post investment for a start-up is the most time consuming/ heavy duty work to execute.
Why do I say this?
Because the entire paperwork just doesn’t end with the first draft – each document goes through many cycles of Draft >> Review >> Edit >> Correct >> Re-Review >> Finalise before it’s ready to be executed in full.
What’s the most difficult part?
Revisiting each document to make a small amendment. Eg: Correcting the Name of the Shareholder which was misspent in one document.
With automation and the advent of machine learning, we expect such small amends to take all but a few seconds.
So, here are my top 5 reasons to support the automation of paperwork (not just for legal but apply it equally for accounting / bookkeeping):
1. The Cloud is the future
Cloud is an everyday reality now. When you have an option to have access to all the documents/ details/ numbers useful for your company’s next investment; all available in a single portal/ platform – things get wrapped fast. It’s easier to work remotely for your team of specialists and not be bound by a specific work location either.
This flexibility to access the data you need in just a few clicks allows for better and faster business decisions to be taken.
2. Saves time and cost
With automation, we know time and cost is saved. This means, the team can now focus on core competencies and provide better and improved consulting.
The savings in terms of time-cost is a significant advantage - people simply do not have the time on hand to go through complex paperwork, print them out, sign them and scan it / worse still post it back to their compliance team. They want to wrap things quickly once the main decisions are taken.
Now imagine having to change the entire paperwork for a small change such as a mis-spelt shareholder name, stuff of nightmares!
3. Version Control
Anyone who has worked in a big organisation would know all about version controls. Small amendments are easily done via the right software. Remember the example we gave – a misspelt Shareholder name above? Things like that does not require an army of people pouring over page after page of documents created to make changes.
4. Improves the quality of service
With reduced time cost and resulting savings for the Company, it is only natural for the entire team/ company to focus on improving the quality of service/ output and in return aim to yield higher returns. This is our company’s core objective – a good service, reasonably priced.
Imagine companies like Zegal and Seedlegals , they have taken actual pain points for people going through their funding rounds and simplified the most onerous of the tasks.
5. Its environment friendly
This for me personally, this is the most important reason. We have done enough harm to the environment cutting down trees for papers. If we can save a single tree with reduced paper work from just one resolution, imagine the trees we save automating one pre-investment round; now multiply that with each investment round for about 100 clients – we almost save an entire forest
Let’s Conclude in Year 2030….
Blockchain (or something similar) would enable funding rounds to be concluded within days if not hours. Information exchange happens within secure platforms with the human element supporting the more crucial requirements in the event – such as negotiations. And yes, the funds should reach your secure platform (whether that would be a bank account, we don’t know) much sooner than we expect now.
Evalua8 offers growth advisory and funding round documentation support, drop us a line with your requirements and we will write to you with our thoughts.