At Axial, we work with thousands of Members whose mission is to intelligently put capital to work. We work with Fortune 500 corporations, senior lenders, mezzanine debt providers, and private equity firms of all shapes and sizes. As a result, we’re witness to a wide spectrum of deal sourcing strategies and outcomes.
Some groups, like High Road Capital Partners, have made deal origination an exact science. Other firms are left scratching their heads when their deal sourcing efforts fail to bear fruit.
The One Critical Factor
As we’ve noted before, reputation is critical to deal sourcing success. The top factor we’ve seen driving your reputation, and deal flow, is very simple: responsiveness.
Firms who make polite, courteous response a top priority experience a far greater degree of success in their deal origination efforts than folks that take a more passive approach and only respond selectively.
Most firms we speak with in the deal community know they need to be responsive, but the overhead associated with following up can be exceptionally burdensome. It’s common to have an overflowing email inbox and a voicemail queue with dozens of messages, all requiring some sort of follow up.
Being responsive need not require a tremendous investment of your time, especially if you’re using technology to augment and support your deal origination efforts.
In the world of traditional sales, we’ve seen the rise of an entirely new category of software systems, dubbed Marketing Automation Software, to help create scalable personalized interactions with a firm’s potential customers. Similarly, using technology in your deal origination efforts can help ensure your firm is perceived as attentive and responsive without completely draining your bandwidth and your resources.
If you’re using a CRM or modern email system, most come equipped with email templates you’re able to deploy to different groups or lists of contacts. Take the time to do more than simply send out a blast email detailing your investment criteria. Use straightforward email templates to ensure you can quickly respond each time a business owner or intermediary sends you a message or, better, a relevant investment opportunity.
If you’re a Member of Axial, the process is even simpler. Clicking the “Pursue” button on any relevant opportunity does more than just indicates your interest on a particular deal. It shows that you’re active, that you’re responsive, and that you’re treating each opportunity for what it is – a potential relationship.
Optionality and Serendipity
Responding to every intermediary – either on your own or using tools like those we build here at Axial – confirms your level of activity and engagement. And it gives you optionality. Maybe this particular deal wasn’t a perfect fit. But the act of responding to the banker gives you a chance to define your perfect deal. And often it’s that context and insight that uncovers a different opportunity. One that IS the perfect opportunity.
You’ll never know if you don’t respond.
And that’s why the best private equity firms make responsiveness and engagement a hallmark of their reputation and a cornerstone of their deal origination philosophy. More than anything else, the simple act of responding with a courteous reply establishes the potential for future opportunities and opens up options that would otherwise not exist.
If you’re a Member of Axial, it’s as simple as clicking Pursue.
Image thanks to Sister72