Using Private Equity Automation and Data to Scale Your Firm’s Deal Pipeline

The private capital markets are as competitive as ever. Deal teams nationwide are vying for new business across all industries and looking for ways to get a competitive edge and scale their deal pipeline.

For many, that means expanding or improving their private equity technology stack. According to a survey of 137 venture capital firms, 59% of respondents say that their reason for increasing their technology spend is to improve their ability to find and execute deals.

How are these firms using new capabilities to grow their pipelines? There are four main ways they are leveraging private equity technology:

  1. Providing access to a centralized database
  2. Improving deal sourcing
  3. Enhancing their networking and communication efforts
  4. Conducting better due diligence

Giving Private Equity Deal Teams Fast Access to Good Data

There was a time when firms and deal teams could get by with very little private equity technology, and that included having no centralized database. Those days are long gone.

Today, firms need a hub where everyone can enter and find data quickly and efficiently. This is especially true as organizations increasingly adopt a “dispersed workforce” model. Effective deal flow management is no longer possible using emails, documents, and spreadsheets.

Not only can a purpose-built private equity database like Altvia make it easy to gather data, but it can also help deal teams answer questions like:

  • Who is our top-performing deal source, by returns to the fund?
  • What stage of the due diligence process are we in?
  • What are our conversion rates at each stage of the deal pipeline and where do deals stall?

Answers to these and similar questions can make a significant difference in a deal team’s performance and success rate.

 

How Deal Teams Are Finding More Opportunities

When it comes to deal flow management and getting more opportunities into the pipeline, the most successful firms are turning to data providers PredictLeads, DataFox, SourceScrub, Crunchbase, and Preqin, to name just a few. Deal teams are integrating information from these providers directly into their CRM system and creating criteria for “signals” or “triggers” that are generated when a new opportunity arises. This workflow automation frees them to focus on other tasks until an opportunity requires their attention.

Many teams are also using LinkedIn to help with deal sourcing. When an opportunity is identified, they use the system to obtain basic background information like location and employee headcount for vetting purposes.

Connecting with Business Owners

In order to reach out effectively to business owners that you’ve identified as prospects, you need two types of technology: a private equity CRM (as noted above) and an email system like Correspond: Market Edition that streamlines and automates the creating and tracking of emails. Information provided by the solution helps you identify people who have opened your email so you can follow up with a phone call. It also enables you to find bad email addresses so you can remove them from your database and keep your data “clean.”

LinkedIn is a popular tool for business networking and finding business owners to reach out to. Once you’ve identified your target contact, tools like ContactOut, and LeadIQ can help you find verified email addresses so that you can add them to your database and include them in your automated outreach initiatives.

 

Performing Thorough Due Diligence

As the team’s deal pipeline fills and its outreach efforts are producing qualified leads, the next step is to start interacting with those organizations. A virtual data room and engagement platform like ShareSecure makes it much easier for you and your prospects to share all types of files—documents, due diligence questionnaires (DDGs), photos, recorded virtual meetings, etc.

Empower Your Deal Team With the Right Private Equity Technology

The tech stack your deal team implements will have a significant effect on their ability to find leads, nurture relationships, and ultimately close deals. You need to equip them with advanced, private equity technology—especially if they are working remotely—so that they can scale their deal pipeline and meet your growth objectives.

Download our free guide, Winning Deals in a Hyper-Competitive Market. This valuable resource covers how the market-leading private equity firms are using technology and data to differentiate themselves, gain a competitive advantage, and attract new deals.