Do you know what deals are currently in your transaction pipeline? How long does it take you to gather and distribute a report to your transaction team? Private Equity firms are turning to the world of CRM to help automate and track these Deals.
A Private Equity’s transaction team typically encounters the following four pain points when it comes to their deal pipeline:
- A team member can’t view or understand the entire deal pipeline at any point in time – only when a list has been compiled manually (like an Excel sheet) from all team members, across all deal teams.
- A team member doesn’t know if someone at the firm has looked at a Target Company in the past, and if they did, why it was passed over the first time.
- A team member has to remember to fill out key dates in a sheet when a deal hits each milestone (such as an IOI or LOI submitted).
- A team member has no way of easily understanding or tracking related deal information, including referral companies and individuals of each deal, lenders’ finance options, and due diligences performed.
Private Equity firms have been turning to CRM tools, specifically Salesforce.com, to help remedy these issues.
First, Salesforce.com offers its Private Equity and Venture Capital template to capture many of these distinct custom items – including items like deals and funds, in addition to accounts, contacts, and other standard Salesforce.com objects. Leveraging these custom objects allows Salesforce.com to become the central hub for capturing the same data points you would track on an Excel sheet for a list of deals. Each deal is captured in its own Salesforce.com record, allowing them to capture typical data points like the target company, the deal stage/status, the deal referral contact or company, and others. If your entire team is leveraging Salesforce.com to capture each deal, a team member is able to view your firm’s entire deal pipeline almost instantly through the click of button. This allows greater visibility across your firm to better understand what your transaction team is spending their time on.
Second, memorializing past deals in Salesforce.com allows for team members to view historical deal information, indicating if your firm has ever considered acquiring the Target company in the past. While you capture data points throughout the deal lifecycle, a team member can review this data in the future to identify reasons why the deal fell through. Finding historical deals in a single, central location can save precious man-hours trying to hunt down and find historical information or people to identify reasons why your firm passed on a deal in the past.
Third, you can automate capturing certain data points during the deal lifecycle by creating workflow rules. These workflows can capture the date a user updates the deal stage to indicate a milestone has been reached in the deal lifecycle – for example, LOI Submitted Date when the deal stage is set to “LOI Submitted”. This reduces the amount of data points that a team member has to manually capture.
Finally, Salesforce.com allows you track related data regarding each deal in your Pipeline, such as contacts associated to the deal and their role, the lenders who were shown the deal and their finance options, due diligences and the service provides who performed them, and many other items. Again, capturing this information helps to memorialize the deal as best as possible, all for a wealth of knowledge to institutionalize within your firm, as well as helping your transaction team navigate historical deals in the future.
“So what?” you may be asking. Well, all of this data, found in a single and central location for all of your team members to use, provides a great wealth of knowledge that is now institutionalized and standardized across your firm. Gone are the days of passing around and manually updating Excel spreadsheets with deal information. Now are the days of seamlessly sharing deal information, and generating your deal Pipeline metrics with the click of a single button, saving you time and headaches in to know what’s in your pipeline.