When it comes to deal sourcing technology, there’s no shortage of options available. However, the key is finding what works for your firm and your existing systems. Remember: don’t get bogged down in the details—focus on getting the job done.
CRM: Your Foundation
Customer Relationship Management (CRM) systems are fundamental to effective deal sourcing. You need a way to:
- Track who you’re talking to
- Store important contact details
- Maintain relationship history
- Share information across your team
While there are major players like Salesforce, Zoho, and HubSpot, along with numerous niche solutions, even Excel can work (though it’s far from ideal). The most important thing isn’t which CRM you choose—it’s how you use it.
Making Your CRM Work
Remember this critical point: a CRM is only as good as the data you put into it. If only 10% of your team uses the system, you’re losing 90% of its potential value. Getting everyone to use the system consistently and standardizing your processes is a game-changer for:
- Team communication
- Information flow
- Transaction management
Deal Identification Technology
When identifying potential deals, remember that transactions are ultimately done by people. There are two main approaches to consider:
Intent-Based Deal Sourcing
This involves tracking specific triggers that suggest a company might be ready for a transaction. For example, if you know startups typically sell at $10 million in revenue, you’d want to engage when a company hits $8 million with 20% growth—that’s the time to step in and offer your advisory services.
Data and Contact Information
Finding the right contact information is crucial. Several databases can help:
- PitchBook (widely used)
- Capital IQ
- Various other databases (with significant overlap)
Choose the one that best fits your firm’s needs and budget.
Building Your Tech Stack
Your essential technology toolkit should include:
- A CRM system
- Deal identification tools
- Contact databases
- Basic communication tools (yes, including phones!)
Additional tools might include:
- Email service providers
- Content writing resources (if you’re doing market research)
- Other specialized software based on your strategy
Matching Technology to Strategy
Here’s a key principle: build your tech stack based on your strategy, not the other way around. For instance, if your strategy involves email outreach, make sure you have email addresses first. It’s about matching your tools to your needs.
The Ultimate Goal: Follow-Up
While we’re talking about technology, remember its ultimate purpose:
- Initiating relationships
- Maintaining consistent follow-up
- Securing opportunities to pitch deals (whether debt, equity, or M&A)
If you’re hitting roadblocks in your pipeline, look at two things:
- Is there a technology gap?
- Is there a messaging problem?
Without proper tracking and technology, you’re essentially shooting in the dark. These tools provide the data you need to track:
- Email opens
- Conversation history
- Response rates
- Meeting success rates
- Whatever metrics matter most to your firm
The Long View
Remember, deal sourcing often involves a long sales cycle. Your deal sourcing technology should support this long-term approach, helping you maintain relationships and track opportunities over time. The right tech stack helps transform random outreach into a structured, data-driven process that generates more appointments and, ultimately, more deals.
Focus on building a system that works for your specific needs, and don’t forget that technology is just a tool to support your relationship-building efforts—not replace them.