Buyers of privately-held companies can’t ignore the proliferation of online social networks. They are new, increasingly viable channels for making relevant contacts and building relationships. While many have formed, the most successful network for business professionals is LinkedIn. The company was founded in 2004 and recently went public on the NYSE. LinkedIn has amassed 100 million1 members, over 12 million of whom are business owners.2 The following five tips will show you how to leverage LinkedIn to access deals, learn more about companies in which you are interested, and connect with companies and people in a more meaningful way.
1. Harness the Power of Advanced Search
Only rookies use the search bar at the top of LinkedIn pages. For deal origination, you’ll want to use LinkedIn’s Advanced Search instead. You can search by industry, location, and more. The Relationship search is particularly neat. Let’s say you want to connect with Company A, but aren’t sure how best to reach out. With Relationship search, you can view people who work at Company A by how closely connected (1st degree, 2nd, Group Members, or 3rd degree) they are to you. This can be a powerful way to reach out to a company faster and help prioritize your outreach, so you can jump into the deal process more efficiently.
If you have an upgraded account with Premium Search Filters, LinkedIn enables you to search by seniority, years of experience, company size, and function as well – all useful parameters for M&A professionals to structure their networking and outreach. Advanced Search also allows usage of Boolean criteria (NOT, IF, etc). And, with Advanced Search, you can surface a deeper look at a company of interest by displaying all current employees, not just the executive team.
2. Join M&A Groups
LinkedIn has a huge community of M&A professionals participating in Groups. One of the most valuable ways to utilize LinkedIn for deal origination is to join some of these popular forums. After you join a group, you can elect to receive a digest of activity via email daily or weekly.
3. Build a Robust Company Profile
As a buyer of private companies, you may be looking to find out about others, but remember, sellers and their advisors want to know about you too. If your firm does not have a website, use a LinkedIn company page instead. LinkedIn company pages make it easy to articulate and promote your business. They take little time and no cost to set up. A LinkedIn company page looks professional and is easy to find; you’re bringing your company presence to the place where your acquisition prospects are already located, rather than trying to reel them over to a new website.
To enhance your LinkedIn page, add Apps (like SlideShare presentations if you’re often presenting at industry conferences or an RSS feed from your blog). Write in the third person for a more professional tone. Utilize all the links you are allowed to incorporate on your profile, including your company’s Twitter account and blog (if you have them). Keep your profile up-to-date, as people will view it when they are researching you and your firm.
4. Use Statistics to Inform Your Due Diligence
Deal origination is about quality opportunities. The more information that you have, even before due diligence or the NDA signing stage, the more likely you are to pursue the right opportunities more often. By using LinkedIn to learn about the company, management, personnel, competitive advantages, and industry, the less time you potentially waste in pursuing low-quality deals.
Each company on LinkedIn has a Statistics page. Use the URL, https://www.linkedin.com/company/COMPANYNAME/statistics, to access this powerful data that aggregates the information provided by employees via their LinkedIn profiles. Statistics include employees’ job functions, years of experience, educational degrees, geographies, and more. The quality of employees can tell you a lot about the business, and any potential opportunities or challenges following an M&A process. My favorite data sets on LinkedIn for deal origination are:
Annual Company Growth – This graph shows trend lines in personnel, filterable by departments such as General & Administrative (G&A), Sales & Marketing, Research & Development (R&D), and Executive Leadership. This is extremely valuable as you are trying to assess the company’s changes in human capital over time and their hiring priorities.
Company Flow – This module on the right sidebar of the Statistics page shows where the company’s employees worked before joining the firm, and if they left, where they went. This can be helpful to discover competitors you may not have known about, or partnerships you may be able to harness.
5. Advertise to Promote
While LinkedIn can effectively be used for free to market yourself and gain insight into target companies, you can also promote your firm using paid LinkedIn Ads. Unlike other social networks or search engines, the benefit of using LinkedIn is that you can hyper-target your advertising. LinkedIn Ads can be directed by geography, job title, company, group, and demographics.
LinkedIn will charge you for the ads on a Pay-Per-Click basis, which means your ad may be seen hundreds of times, but you don’t need to pay unless someone clicks the ad to visit your website or LinkedIn profile page. LinkedIn Ads tend to be more expensive (about $3 per click in financial services from my experience), but they are also more effective for the business audience than Google, Facebook, or other social network advertising programs.