It’s not what you know, it’s who you know. That’s how the saying goes.
But today’s fund managers looking to simplify deal flow management might argue you need both “who” and “what” to remain competitive.
In 2019, Private Equity raised almost $595 billion, the fourth straight year it surpassed half a trillion dollars, according to Preqin. That’s the third-highest total on record. It’s also a lot of moving parts when it comes to making deals and raising funds. Firms that efficiently and effectively manage deal flows are the ones who will come out on top.
What is deal flow?
Deal Flow is the rate of investment opportunities being received by Private Equity and other investors. As you might expect, the state of the economy impacts the rate of deal flow, with deals following a cyclical pattern based on societal and economic trends.
Venture funding, private placements, syndication, Initial Public Offerings (IPOs), Mergers and Acquisitions—these are the proposals that makeup deal flow. To build a deal flow pipeline, fund managers might attend Venture Capital or Angel investor meetings, sit in on startup demo days, go to entrepreneur meetups, and of course, engage in plenty of good old-fashioned networking.
What is deal flow management?
Deal flow management is the organization of this information so your firm can easily access all the relevant data to make crucial, timely decisions.
Keeping track of every piece of information on potential investments—from emails and 1-pagers to financial reports and due diligence docs—is the key to efficiently managing deal flow. And acting appropriately on the critical insights from your deal flow is the key to being an effective player in the market.
Use Tech to Streamline Your Deal Flow Process
From raising capital to signing the final deal, fund managers need to see and understand every single stage of every potential investment. This is especially true for firms looking to increase deal flow, remain competitive, and scale their business.
To stay on top of multiple portfolios in varying stages of completion, a good first step is to assign deal team members to manage investor relationships and fund milestones. To free up your deal teams’ time and gain efficiencies, adopt a single platform that integrates all of your firms’ sources of information for faster access to what they need to make decisions quickly.
Today’s software designed for Private Equity can greatly simplify deal flow monitoring and reporting for your deal team, so they can concentrate on building relationships instead of data entry. Even better, there are tools to optimize your fund and investment evaluation processes and help your firm gain efficiencies in managing deal flow.
Look for deal flow management software that allows your team to:
- Institutionalize the deal funnel with clear stage milestones
- Automate reminders for critical next steps
- Customize due diligence requirements
Deal flow is the lifeblood of any Private Equity firm. How you approach deal flow management can be the difference between nabbing lucrative opportunities and missing out on the deals that define your firm’s success.
Altvia can help your deal team manage, track and report on your firm’s investment pipeline. Discover how Altvia can simplify deal flow management for your firm. Schedule a demo today.