Industry conferences, wine and dinner, the golf course—those are the networking venues in which deal connections have traditionally been made.
While face-to-face interaction is, and
always will be, critical for a successful
transaction, business development and
deal origination efforts are long overdue
for innovation. In the same way that “
tech-preneurs” and the venture capital community have rallied around the Internet to
help power their deal processes (think of
the crowdfunding process or the investor-startup matchmaking site AngelList), so too
should middle-market deal professionals.
The private capital markets have long
relied on manual, time-consuming and expensive methods of business development.
Dealmakers could spend countless hours
and dollars traveling to in-person meetings and industry conferences, gathering
company and adviser data from historical-looking and on-demand databases—all for
just one deal.
Reliance on these strategies alone has
become incomplete as deal professionals
have begun to realize the power of new
tools, such as deal networks, real-time information sources and customer relationship management systems.
Tools such as LinkedIn, Gust and
Axial, for example, are particularly important in a market characterized by
lopsided supply-demand and increasing
fragmentation, factors that have made
maintaining a competitive edge and network integrity more challenging.
By combining online and offline business development efforts, deal professionals can more efficiently find the signal
through the noise that is prevalent in the
middle market. Instead of tirelessly identifying each new firm, its focus and its
strategy, dealmakers can now use online
communities and deal networks to discover new relationships and identify potential investors. The cost of acquiring—and
maintaining—each new relationship becomes simple and scalable.
Tools such as
and Axial, for
in a market
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Ripe for Innovation: How Online Networks
Can Benefit Your Deal Source Strategy