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Ex-SL Capital co-founders launch software co to ease fundraising process

Faulds, left, and Paterson, right, are TopQ co-founders

What’s a private equity executive to do when he reaches 40 years of age? Start another company, of course.

That’s what Graham Paterson, one of the co-founders of SL Capital Partners, did back in 2010, after spending 20 years in the private equity industry.

“I didn’t want to spend another 10 years in one organization,” Paterson said. “I decided to step out.”

Paterson, who was also a partner and COO of SL Capital, left the fund-of-funds firm and tried different things, including investing in tech companies. He took on the role of CFO of miiCard, which verifies online identities using bank account data, but has since left that company.

Earlier this year, Paterson and Graeme Faulds, another SL Capital co-founder, launched TopQ Software.

“We decided to utilize our experience,” Paterson said.

TopQ Software is aimed at PE firms, which while fundraising will often email sensitive data, including confidential performance track records, in very large spreadsheets to LPs, Faulds said. Spreadsheets can be laborious, are not secure and can be sent on to third parties. Faulds recalled one GP saying he had spent 14 hours manipulating the data in one spreadsheet to “get a meaningful analysis.”

“The use of spreadsheets for this task is prone to user error and is open to abuse,” said Faulds.

By comparison, data on TopQ is encrypted and a sharing function prevents unauthorized recipients from seeing information. It takes seconds to upload data onto TopQ, change the information and customize different fields. Users can also easily spot outliers and adjust information to make sure one deal isn’t skewing the data, Faulds said.

“We created the application to accurately slice and dice data to get to the heart of key questions and focus on the important parts of the due diligence process,” Paterson said.

TopQ, which has offices in Edinburgh, London and Boston, is relatively simple to use. A SaaS-based platform software, it’s designed to work on all major browsers and is cloud-hosted. No plug-ins, downloads or installations are required. LPs can also register for free for the TopQ Reader, which allows them to view track records and perform standard analysis. An upgrade to the TopQ Analyzer gives users more widgets and more functionality, Faulds said. A subscription to TopQ Analyzer starts at $15,000.