Most deals in the private markets begin with a relationship, making your team’s relationship capital a crucial asset for sourcing quality deals and advancing your portfolio companies. And similar to other types of assets, relationships take time, commitment, and dedication to build and foster.
As an investment professional, you are constantly pulled in multiple directions. Devoting time to keeping up with all your contacts and actively building your relationship networks can sometimes take a backseat to other pressing tasks and priorities. However, in the private market space, relationships are a great equalizer that allows you to unlock the hidden power of your network and empower your firm to punch above its weight.
For example, in the world of venture capital and private equity, your relationship networks are crucial for sourcing deals, conducting due diligence, and finding connections that can meaningfully change the trajectory of your portfolio companies (key hires, advisors, investors, etc.).
As an investment banker, the right relationships provide warm introductions or referrals to management teams, investors, or prospective buyers, helping you source, manage and close more mandates.
In short, relationships are a differentiating factor that can determine your organization’s success.
Surprisingly, most deal professionals are still tracking and managing their relationships like they did 20 years ago, using their email inboxes and Excel spreadsheets. However, people and relationships are more than just names in a spreadsheet and emails in an inbox.
By continuing to rely on these outdated tools and processes, you are failing to leverage your network to its fullest, resulting in hundreds of hours wasted on data entry, focusing on the wrong connections due to inaccurate or limited information, and missed opportunities.
Relationship intelligence technology can revolutionize how you build and engage with your network, making you a more efficient investor.
What Exactly is Relationship Intelligence (RI)?
Relationship Intelligence (RI) is a technology that generates actionable insights into your team’s network based on data from interactions with people in your or your team’s professional networks.
For example, suppose you want to connect with someone at a particular firm. Relationship intelligence technology can provide the “intelligence” to instantly find who in your organization can facilitate a warm introduction by using a relationship strength score to identify if any of your colleagues know someone at the firm you want to engage with. If this seems confusing, don’t fret; we will review more examples of how relationship intelligence can add value to your firm.
How Does Relationship Intelligence Work?
Relationship intelligence uses machine learning models and artificial intelligence algorithms to analyze data points or metadata produced by every email, meeting, and interaction between people at your firm and contacts they have interacted with.
These data points contain information about who knows who, what they spoke about, how recently they met, etc. By processing and analyzing this information, relationship intelligence platforms develop a relationship strength score based on how well someone from your firm knows a particular contact- allowing you to leverage the reach and strength of your firm’s entire professional network.
Additionally, relationship intelligence platforms like 4Degrees enrich data with information from third-party data sets to provide additional context.
At its core, RI uses communication data to uncover new opportunities you did not know existed before, making your firm more efficient and competitive.
Why Does Relationship Intelligence Matter to Deal-Driven Teams?
Whether in private equity, venture capital, investment banking, or consulting, having immediate visibility into your organization’s network can empower you to uncover new opportunities and nurture key relationships that can drive your company’s success.
Unfortunately, deal makers at most firms spend hundreds of hours per year looking for people or experts in their networks. They send firm-wide emails, ask colleagues, and do other time-consuming tasks. Relationship intelligence automates this process by providing every team member visibility across the firm’s entire professional network and showing the strength of the relationships in seconds, giving firms a competitive edge by connecting with the right person at the right time.
Relationship intelligence drastically saves time by eliminating data entry by automatically creating and updating contact and company profiles using data from your inbox and calendar enriched with third-party information. This process saves teams hundreds of hours annually, enabling them to focus on other higher-value activities like meeting more people and building relationships.
How Relationship Intelligence Can Add Value to Deal-Driven Teams
Relationship Intelligence allows you to leverage your network by identifying better connections and opportunities to source and move deals forward faster.
Deal-driven teams use relationship intelligence CRM platforms like 4Degrees to uncover new opportunities and nurture relationships that drive business.
These are some use cases where relationship intelligence can benefit your organization:
- Create meaningful links and source new opportunities you did not know existed by setting up real-time alerts to notify you when your connections leave, start a job, publish content, or are featured in the news.
- Find your best path or warm introduction to a company, investor, executive, or person through your team’s relationship network. Forget about emailing dozens of people asking if they “know someone at X company.”
- Keep key relationships from falling through the cracks with intelligent recurring reminders that let you know when to engage with key connections.
- Connect others to investors, talent, or experts by having 4Degrees analyze email threads and recommend relevant connections you can make (e.g., making a talent intro or connecting someone to a potential investor).
These are just some ways a relationship intelligence platform like 4Degrees can add value to your firm and set you apart from the competition.
Click here to schedule a demo and learn how the 4Degrees relationship intelligence CRM can help you capitalize on your relationship networks by providing you with actionable intelligence to close more deals.