Docupace CEO David Knoch on Finding a Goldilocks Market Position to Fuel Long-term Growth

The wealth management sector is huge and growing. Wealth managers working at financial advisory firms, broker-dealers, banks and registered investment advisors (RIAs) today oversee $130 trillion in assets worldwide, and that number is expected to grow to nearly $160 trillion by 2028.

To manage all this money, wealth managers must continually juggle a plethora of back-office tasks, from client onboarding and advisor transitions to compliance tracking and secure document management. 

Docupace, founded in 2002, brings all these back-office processes into one place, providing the leading cloud-based unified workflow for wealth management operations. Today, nearly 270,000 customers process over 16 million work items on the platform each year. FTV invested in Docupace in 2020, and the company has since grown tremendously. 

We recently sat down with Docupace CEO David Knoch to discuss how finding a Goldilocks market position and making every decision with a five-year outlook can smooth the transition from startup to a mature company. 

QUESTION 1

You joined Docupace in 2020 after a successful 20-year career in financial services. Why did you choose to join Docupace when you did?

At the time I joined Docupace, I had recently transitioned out of a company we sold, and I wanted a new challenge. I had been in my previous role for 20 years, and for 12 of those years we used Docupace – so I knew the platform very well. Then, FTV introduced me to Docupace as a potential CEO. Docupace at the time was an “18-year old startup.” It had some absolutely great people and underlying tech but hadn’t yet figured out how to fully scale. 

In addition, much of the financial services industry had focused on building software for the front-end, leaving most areas of the back office untouched. We saw this as a unique potential for Docupace to cement its dominance in the back-office wealth management space and to get to the next stage of growth.

QUESTION 2

FTV Capital invested in Docupace in 2020, and since then the company has grown rapidly. Why was 2020 an inflection point for Docupace?

I joined Docupace in April 2020, right at the height of the COVID shutdowns. That was transformative for many industries, but in particular financial services, which had always been in person due to security and compliance regulations. Suddenly, every financial services firm needed to modernize their back-office processes so they could securely be done from anywhere, which is exactly what Docupace does. The pandemic gave us huge momentum. We saw the opportunity to turn Docupace into a high-growth business through new product and leadership strategy decisions. 

QUESTION 3

Docupace is a unified operations platform for wealth managers to run all of their back-office processes. Why was it important to build a one-stop-shop?

Being a comprehensive platform is our entire ethos. In the wealthtech space there are two opposite points of the spectrum – point solutions that solve for a single need and broad, all-in-one ERP-like platforms. Neither really work well for wealth management operations. Busy wealth managers need one place to manage all the time-consuming back-office tasks that are particular to this sector, so they can spend more time serving clients. Docupace is an “Ops-in-One” platform, meaning we exist in the Goldilocks zone where we offer what is “just right” for wealth managers. We specifically focus on the back-office for wealth management, and we bring all the components into one place. We are competitive with each point solution – we can beat the individual tools on their own – but also offer the one-stop-shop integration of larger platforms.

QUESTION 4

The wealth management industry is fragmented, with over five million professionals worldwide working in many different types of firms. How has this fragmentation been both a plus and a minus for Docupace’s growth?

Overall being in such a large market is an asset. We work with the largest players in financial services, brokerages and banks, and when they acquire the smaller players, we get smaller customers through consolidation. And we also work with seven out of the top 10 independent broker-dealers in the U.S., so we feel fortunate to have such a large addressable market. 

However, there is fragmentation, so we have had to think about creating pre-built versions of the platform for certain sectors, like RIA. We built a product tailored specially to that market because they don’t have the capital to do a large, prototypical implementation of Docupace. We meet all of our customers where they are, instead of wishing they could be different. 

QUESTION 5

What is the biggest challenge you have faced as a leader at Docupace and how did you overcome it?

Docupace has long been a great business with great people and great technology, but when I joined, we were still operating like a startup with everyone wearing many hats. I asked myself: “How do we transform Docupace into a mature company without ruining its scrappy ethos?” I needed to move people into the right roles without disrupting what was already working, and to chart a course for the future without sabotaging our collaborative culture. 

To do this, I first focused on technology – really getting engineering and product aligned with long-term goals. Then, I got buy-in from the executive team to make some critical business-process and staff decisions. We had to get comfortable with the idea of patience. I recognized the journey was not to reach a certain milestone in a month or a year, but to implement lasting change in how we ran our business day-to-day. 

QUESTION 6

What are two pieces of advice you would give to early-stage fintech founders just getting started?

I always tell our teams to “hold on to small problems lightly” and to not judge themselves and others too harshly for small mistakes. But, on the other hand, to remain highly intolerant of imperfections so we can fix them. 

Second, a lot of founders get stuck in the here-and-now and forget to envision the future. I am of course guilty of that at times as well; it’s hard to stay on top of so many urgent tasks. But I try to make every decision an accountable one. What will this hire mean for the company in five years? How are we acting with our customers today that will impact our future journey? I have seen many founders regret that they didn’t plan ahead. Instead, they just end up somewhere and wish they had taken another route.

QUESTION 7

FTV has decades of experience investing in high-growth fintech companies. What are some ways the FTV team has supported Docupace’s growth? 

Since I joined as CEO, we have been very intentional about inorganic growth, and we couldn’t have made our two recent acquisitions, jaccomo and PreciseFP, without FTV. They were impactful in making introductions, doing diligence and providing strategic guidance at every step. And since we acquired these companies, FTV has helped us integrate them successfully to contribute significant new revenue lines.

Secondly, FTV has huge expertise in so many domains. The FTV Propel® team worked with us on go-to-market, business development, product strategy, marketing, sales – you name it. In fact, FTV’s Chief Revenue Advisor Bob Ranaldi served as our interim CRO before Michael Vossler came on board. Talent Partner Ali Walker led leadership assessments on all our senior candidates during the hiring process. Chief Technology Advisor Milo Sprague has helped with extensive technology diligence work; Marketing Principal Annis Steiner works closely with our chief marketing officer; and Strategic Business Development Principal Marija Periša Kegel has brokered numerous commercial introductions via FTV’s Global Partner Network. Our contacts at FTV are far more than advisors; they are active team members rowing in the same direction as us.