You’re sourcing private equity deals. What tools should you use to streamline your workflow?

Working smart is the key to sourcing private equity deals, and my go-to tools are like my gaming companions. Start with comprehensive deal databases such as CB Insights and PitchBook to get a broad overview of the market. CRM systems like Salesforce keep everything under control so that the search can be optimized. DealStreetAsia and other news aggregators assist in keeping track of trends and possible leads. The true game-changer, though? Personalized algorithms and artificial intelligence (AI) tools—like Kensho—that process data, identify patterns, and optimize the entire process. It all comes down to establishing clear standards, making use of these resources, and transforming the deal-hunting process into a calculated dance.

Here are some tools you can use to streamline the sourcing workflow: 1) Market research and data analytics (such as Bloomberg Terminal) 2) Relationship management software 3) News and information aggregators (Google Alerts, Feedly) 4) Deal flow management software such as IBISWorld

A 3-step approach can be followed: 1) Collate potential targets & related data: A huge dataset of companies can be obtained using databases such as Cap IQ, PitchBook, etc. or scraped from LinkedIn; this includes collating all of the companies' data (locations, overview, funding, investors, etc.) 2) Store everything on a common database: All the datapoints can be stored at the backend on databases such as SQL Server or even an Excel 2) Leverage advanced tech: The frontend can be made sophisticated using analytics, data mining and AI to make data fetching easier; for instance, attractiveness scores can be automatically designated to all targets (based on say, ownership, funding, locations, etc.), industries can be assigned, and much more

Defining your criteria is the first step in streamlining your workflow. Once you have that clarity, leveraging technology and data analytics tools can significantly enhance your deal sourcing process. Tools like PitchBook, Capital IQ, and Crunchbase are great, but don't overlook the power of networking platforms like LinkedIn for direct engagement and industry insights. Combining these tools with a systematic approach to tracking and managing leads can help you identify and pursue the most promising opportunities efficiently.

Network, network, network. How do you learn about deals when you are far from the people who have a tab on these opportunities in the first place? Curating your network is vital- building it up over time and actively fostering it. Engage regularly and provide support to your peers with the more expansive PE space, including advisors and bankers but also sector experts and shareholders of critical targets.

Storing and accessing a vast amount of documents involved in deal sourcing requires an effective document management system. Using cloud-based solutions like Google Drive or Dropbox has facilitated efficient and organized document storage and retrieval. For deeper analysis and insights, advanced analytics tools are beneficial. Tools that allow for big data analytics and predictive modeling can aid in identifying trends and making data-driven decisions in the deal-sourcing process. In the current remote working environment, effective collaboration tools like Zoom or Microsoft Teams are essential for virtual meetings with potential deal sources, investment committees, and other stakeholders.