A large pile of carefully stacked application forms -- around nine kilos in all -- was everyday life for board members of the Kemp & Lauritzen Foundation. Secretaries at the organisation spent about 90 hours preparing the paperwork packages for board members and then later shredding rejected applications.
It was inconvenient, but it was the beginning of the Grant entrepreneurship project, which has developed a solution that collects all applications digitally and aims to simplify troublesome administration of loose leaf systems.
With this solution, the fund will no longer have to pool data from applications in the physical mailbox and print out digital mail. Everything takes place on one platform within a fixed system.
"Our cardinal point is that it must be easy to use the system. You can manage all duties surrounding grants and holding meetings, and that's what we handle. The other stuff, law and audit, we don’t touch," says Sven Müller, one of the three founders of the company.
ITWatch, an AMWatch sister site, meets Sven Müller and his co-founder and friend through 30 years, Morten Bak, in Bak’s office in Copenhagen, where the daily work on websites and graphic design happens. Opposite Morten Bak's desk is an empty space where the third co-founder resides: Jacob Eiler, who is described as "a programming and development wizard."
Sven Müller, who is an associate manager at Novo Nordisk, has experience from working in a fund, unlike Morten Bak, whose partner is a fundraiser, however, and thus the team has covered both ends of the spectrum.
The system manages communications within the directorial board regarding applications, allocation of funds, administration of the board of directors, and final reports.
The Danske Bank unit Danske Bank Forvaltningsafdeling, Denmark's biggest and oldest fund management unit, has jumped on board the solution. ITWatch has contacted the unit’s responsible person, who prefers to answer questions over e-mail, but did not reply before article’s publication.
Milk crates full of paper
The idea formed when Sven Müller was growing tired of lugging milk crates to board meetings – and then balancing the paper stacks in there. He saw a continuous increase in workload and applications. So he began to investigate option for reducing paper-based work. That meant finding some people who knew their way around IT.
"Then Sven came to me, presented the idea and asked if I wanted to help build the project. It was a very exciting offer, so I said yes," Morten Bak says.
This turned into the first version of what is now the Grant.nu management system, which was adapted to the Kemp & Lauritzen Foundation, where Sven Müller, as mentioned before, is engaged.
"It was developed for us, at an entirely different price than what we charge now, but it still became a good investment, which broke even after about three meetings," says Sven Müller, who could see both the amount of paper and the administrative costs nose-dive after the new IT system’s introduction.
Today, the solution is sold in different packages, depending on how personal and comprehensive the platform needs to be. The price is in the range of DKK 15,000-150,000 for the version with most additional services.
"Many funds want to do things a very specific way – we've probably heard most requests by now. The functionalities that are not already built into the finished versions can be purchased as an additional service. For example, if you need a consultant or expert to comment on something, you will get a list of experts from the system and all the communication can take place through there," says Sven Müller.
The platform is "very close" to being ready for launch, but some funds are already using it.
Most medium-sized funds
The two founders estimate that there are more than 7500 registered funds in Denmark, and then "a few thousand" very small funds.
The largest customer group will be in the range of DKK 25-500 million under management, but the two founders say that the fund can work for funds of all sizes.
"My feeling is that there are many, many medium-sized funds in the range of 25- 500 million.", Says Morten Bak.
The current customer portfolio also lies in this group.
The two founders state that, based on conversations with customers, they believe that their primary competitors will provide solutions in which auditing and legal consultations are included.
Ready for GDPR
Sven Müller explains that, with the forthcoming personal data regulation, GDPR, it will be "hard to keep working with loose leaf binders" as the Kemp & Lauritzen Foundation did until it adopted the new system. However, this is not to say that all medium and small funds today operate exclusively in the physical paper world, he assures.
"Some funds have a home-made system with Excel sheets and e-mails back and forth, or a tailored solution from a local programmer, and it may work very well. It just does not comply with the current rules on, among other things, the personal data protection area. We believe that they are facing a really big challenge," Sven Müller says.
Security and compliance with rules is mentioned several times. The system is "tailored" to the upcoming regulation. This means that old applications with personal data are deleted after some time. It is meant as an alternative to the secretary shredding 9-kilo crates full of paper applications.
One of the means to achieving this is a so-called data processing agreement that explains where, why, and to what extent data is stored in the solution – kind of guarantee the funds can hand over to the Danish Data Protection Agency.
"The architecture of the system is built around the personal data regulation, and the system cleans itself, depending on how you use the application," Sven Müller says.
"You do not need legal assistance when using our solution. The system handles that," he says.
He explains that if an application is granted money, it is stored for five years for accounting purposes, while the system cleans out all personally identifiable data from a rejected application.
Does not need a customer explosion
As previously mentioned, the company consists of three men, all of whom have other primary jobs besides being IT entrepreneurs. This is a big advantage in terms of need for future sales.
"We need to sell to a few more customers before the project breaks even. However, with the agreements we have now and the ones we expect to get, it will work out. Our business model is not one where we need a flood of customers for the business case to make sense," Sven Müller says.
"We can survive in several volumes, but we have an ambition and expectation that the Danish market is the beginning. There are some countries around us that could be interesting to expand to, where the primary work is to look at a new language version," he says.
English Edit: Marie Honoré
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