How does Passthrough plan to acquire customers through fund administrators and law firms, and what kind of network effects are expected?

Everybody gets a different kind of value. The fund manager is paying for a premium experience to bring their investors on board so they can close quickly. Maybe they save a couple of bucks on billable hours, but it's not something that we sell. The investor is getting a pretty seamless process for how to invest into a fund.

Right now, what the fund administrators are doing is extraordinarily labor-intensive and extraordinarily error-prone, so we treat them like customers, even though they don't pay us. 

We learned from Carta that it’s not a good idea to actually position yourselves as eliminating law firms or trying to reduce the billable hours that people are paying for when they’re, for example, incorporating their company, going through a round of financing, or maintaining their equity stack.

There's something similar here. You can build software that makes the process easier and the value is that you might actually take some of the worst hours off of a law firm's plate. Like, you've got a third-year associate who's chasing down a signature somewhere. They went to law school to go chase down a signature. It's pretty much the worst thing that they can imagine doing on any given day. We take that work off of their plate to allow them to run everything more efficiently. It also allows them more time to provide the strategic advice that, first of all, everybody wants to give. And second of all, that’s probably also going to factor into the total cost of that engagement.

That’s why, net-net, we position ourselves as partners of law firms and partners of fund admins. Our goal is that all these partners know that it's simpler for their clients to be on Passthrough than anything else. We can spit out the data in whatever format they need. We’ve built all of these different things for how to make their processes way simpler because we know that if they don't have a good experience, then the entire engagement could be ruined.