For deal-driven teams (venture capital, private equity, financial services, real estate, etc.), it’s all about who you know. And keeping track of your network is crucial for success. Unfortunately, traditional relationship management systems have not been designed with dealmakers in mind.
Most deal-driven professionals have tons of information on who knows who, who met with whom, recent funding, relationships, etc. The problem is that all this information is siloed, living in someone’s legal pad, inbox, notetaking app, or an obscure spreadsheet. Due to its disparate nature, sharing these data points with other team members is challenging. So what is the value of maintaining all this information about your business relationships if it’s not readily accessible?
Unlike traditional generic CRMs such as Salesforce, Hubspot, Microsoft Dynamics, etc., Relationship intelligence (RI) Platforms don’t just store contact information and interactions.
RI platforms analyze relationship touchpoints and data to provide intelligent insights. Emails, calendar meetings, and phone call notes, among other data sources, are all used to map your firm’s relationship network.
Deal teams looking to punch above their weight by leveraging the power of their relationship network should look beyond spreadsheets and the traditional CRM as their primary data management tools. What is the use of modern systems like Pitchbook, LinkedIn, and Capital IQ, if your deal information is outdated, inaccurate, siloed in disparate spreadsheets, and not readily accessible to the rest of your team?
In this article, we go over 8 ways deal-driven teams in venture capital, private equity, M&A, investment banking, consulting, and real estate can benefit from implementing a relationship intelligence platform.
Purpose Built for Deal-Driven Teams
Packed with functionality for relationship-driven firms. Relationship intelligence CRMs are unlike generic CRMs designed for sales teams to manage a traditional linear sales process. Relationship intelligence platforms like 4Degrees enhance a deal team’s operations by empowering them with advanced insights into their business relationships, what we call relationship intelligence.
In essence, relationship intelligence technology empowers decision-makers to source and close more deals in less time.
Automate Manual Data Entry
A recent survey showed that data entry is one of the most despised workplace tasks. And as a busy deal professional, we know you can spend your time doing more high-value work than manually entering data into a CRM or spreadsheet, especially when a typical deal or engagement consists of hundreds or thousands of emails, phone calls, meetings, and interactions that need to be logged into the CRM.
Relationship intelligence platforms save teams hundreds of hours annually by automatically capturing all communications by syncing with your emails and calendars and updating deal records. Contact and company records are also enriched with high-quality data from third-party sources to ensure your data remains up-to-date and accurate.
By keeping a high level of data integrity and eliminating manual data entry, deal teams can ensure nothing falls through the cracks, be more efficient, and spend more time building and growing their networks.
Staying on Top of Your Relationships
How do you keep track of your vast network? How do you know if one of your contacts started a new position? Published new content? Made a new investment? Or started a new company? These data points are crucial to helping you create meaningful links with your connections and nurture new sourcing opportunities. But how do you know when to best reach out to your contacts without these crucial details?
Relationship intelligence systems such as 4Degrees alleviate this pain point by providing you with real-time alerts by using artificial intelligence to mine the internet and surface intelligence on whether your connections have recently started or left their job, published content, or been on the news (for a recent transaction, etc.). With this knowledge, you will know when to best reach out, build stronger relationships, and source new opportunities.
Generate More Warm Introductions
“Who is the best person at our firm to reach out to this person?” or “Do we know anyone at company X?” These questions are all too common in the deal-driven world, but unfortunately, they take days or even more time to answer, and as we all know, time kills deals.
Relationship intelligence platforms have unique algorithms to analyze your team’s collective network and generate a relationship strength score to identify who on your team can provide you with the best path to a warm introduction and increase your ability to connect with the person or company you are trying to engage.
These introduction paths would remain hidden if you still use your inbox or generic CRM software to “keep track” of your relationships and interactions.
Staying Engaged With Key Referral Sources
For the domains and industries you’re active in, you likely see several contacts as sources of deal flow that you’re either trying to maintain or grow your relationship with.
Relationship intelligence platforms like 4Degrees have recurring reminder cadences that can be easily programmed to ensure you stay engaged with your key referral basis regularly. This helps your firm stay top of mind when interesting opportunities come their way.
By supplementing your reminder cadences with real-time alerts (explained above), you now have an authentic, event-based reason to reach out and re-engage with your contacts at just the right time.
Conduct Due Diligence in Less Time
As you’re assessing the viability of different opportunities, being able to rely on your team’s network for their judgment is critical. Experts you know will typically get you faster responses (critical in competitive situations) that you can trust more easily (you know more about their expertise) without spending money on hiring an expert network.
Relationship intelligence platforms like 4Degrees surface potential diligence experts both proactively and reactively. On the proactive front, using the tags on a deal to surface people in your network with similar areas of expertise and focus. On the reactive front, you can filter your team’s network by relevant areas of focus (e.g., “AI Experts”) to find people in your network focused on that category.
Add More Value to Portfolio Companies
Often, portfolio companies rely on their investors to find introductions to top talent, partners, and other service providers.
Relationship intelligence platforms empower private equity or venture capital firms by allowing investors to search their network by area of focus and make high-value introductions to their portfolio companies. As many management teams can attest, finding a Vice President of Product or a CMO is no easy task, and having your investors connect you to the right person can be a game changer for a company.
For example, on the customer introduction side, introducing a B2B portfolio company to a new $100K ACV deal, based on a valuation of 10X ARR, could result in a boost of $1 million in enterprise value. All this from using a relationship intelligence platform.
Build Stronger Relationships with Limited Partners
Getting on the radar of a prospective limited partner is nearly impossible without an introduction from someone they know and trust. Relationship intelligence platforms leverage relationship data to give your team the insights to find who in your firm’s collective network is directly connected to a limited partner or someone who could make a warm introduction.
Real-time information about potential limited partners in your network provides you with the data to help you create meaningful links and build stronger connections with potential LPs. When the time is right for a fundraising conversation, relationship intelligence platforms empower you with the data you need to provide potential LPs with information about your fund, its performance, deal pipeline, etc.
By having the tools to build stronger relationships, you can generate more high-value introductions and reach your firm’s fundraising goals.
Compare this to the expensive process of going through a placement agent that can charge upwards of 3% commission of new capital raised for the fund.
Accelerate Business Development With Data
Relationship intelligence platforms provide you with dealmaking insights allowing your team to understand how efficient your deal flow is, if there are any bottlenecks in your closing process, who your best deal sources are, etc.
Access to these metrics enables your team to uncover unique insights and makes your firm more efficient at finding and closing deals. Whether raising a fund, driving an M&A process, or closing an investment round, having access to accurate data in real time will make you more efficient by spending more time on high-value activities.
Becoming an Efficient Data-Driven Deal Team
Having the right technology stack is no longer optional. With investments in the private markets slowing down, firms will need to become more efficient at sourcing, managing their pipeline, and closing more deals. Having the power to leverage your team’s network while automating and optimizing time-consuming processes is the name of the game in 2023 and beyond.
To learn more about how a relationship intelligence platform can make you a more efficient investor, please schedule a personalized demo of 4Degrees– The relationship-driven platform for investors by investors.