Meeting industry peers and staying in touch with professional contacts are the best ways to influence deal flow. Although LinkedIn is the leading tool for connecting and maintaining contact with fellow dealmakers, it lacks certain elements that would greatly benefit private equity (PE) professionals.
PE dealmakers approach relationship development differently from outside industry players. For example, PE professionals need visibility into the strength and relevance of their various relationships, and need to know whether those relationships can support or produce new deals. Because LinkedIn does not offer all this information, professionals should adopt alternative relationship-building strategies and take a holistic approach to networking.
Learn how attending networking events and using additional platforms like DealCloud can help you expand your network.
Access one-to-many relationships
LinkedIn lets users view basic, one-to-one associations, such as mutual connections. To better source new relationships, however, dealmakers need one-to-many relationship data, including who knows whom and how.
A PE-specific CRM like DealCloud offers this capability. Dealmakers can sync Pitchbook, SourceScrub, or Preqin with their DealCloud interface to quickly and easily learn:
- Who’s talking to whom
- Which company or firm each contact represents
- When you connected with each contact
- What deals the contacts have closed on in the past
DealCloud offers sorting, filtering, and grouping and indexing by custom criteria to organize all this valuable data.
View strength of relationships
LinkedIn shows users whether two people are connected, but the platform leaves out key information that PE dealmakers need. Is the connection casual, or is it a strong, loyal partnership? Do these people still connect regularly? If so, how? If not, why not?
DealCloud captures and analyzes the medium, recency, purpose, and familiarity of every touchpoint to automatically score the strength of each relationship. For a more accurate score, firms can weigh certain factors differently, allowing them to better reflect their investment theses and goals for new relationships. For example, a firm may consider the medium by which two people connected — such as an in-person meal or email exchange — to be less important than the connection’s recency.
By sharing these kinds of nuances, relationship scores give dealmakers valuable institutional knowledge that is often otherwise spread out across departments and siloed among different groups of employees. Although LinkedIn is helpful for sourcing new connections, the social platform cannot house additional, vital relationship-based information in a transparent way.
Explore other users’ relevant histories and goals
When you find a potential connection on LinkedIn, you may have visibility into that person’s industry, geography, and firm. But without hyper-relevant information such as deal history and investment theses, you won’t be able to take an informed outreach approach, and can risk fumbling your introduction.
A LinkedIn message from an irrelevant source can sour a relationship before it even begins. In a recent post on a Wall Street Oasis discussion forum, an investment banking (IB) analyst shared that they had received a cold LinkedIn message asking for a referral. Such abrupt and impersonal messages can deter people from connecting with you.
With a PE-centric CRM like DealCloud, however you can see a contact’s dealmaking history and capabilities. DealCloud’s DataCortex solution lets you research your contact’s past and current deals so you can tailor your outreach, make a better first impression, and forge more meaningful connections.
Integrate with workflows
Currently, LinkedIn doesn’t integrate with work management or collaboration tools like Slack, as most people only use LinkedIn as a networking, recruiting, and job-seeking platform. However, for PE dealmakers, network relationships and transactions are inseparable, and fund managers need the ability to view both simultaneously.
With DealCloud, users can view their network intelligence within their deal management interface. Everything PE dealmakers need is easily accessible in one place.
DealCloud makes it easy to understand the strength and depth of institutional relationships — without switching contexts.
Leverage purpose-built CRMs and social platforms
With a PE-centric CRM in place, PE dealmaker`s can gain more traction in their efforts to nurture a thriving, profitable network. LinkedIn can still prove useful when searching for connections, but dealmakers must firmly situate the social network as a supplemental relationship-building tool.
Some of the best connections are made in conversations prompted by an influencer or journalist’s well-posed question or observation on social media. You can also engage with additional social platforms such as:
- Twitter communities — Instead of scrolling mindlessly through Twitter’s feed, create a private list of influential PE voices such as general partners (GPs), investment bankers, journalists, and advisors, and scan your new custom feed once a day.
- Reddit threads — Join one of Reddit’s private equity subreddits to read candid conversations about navigating transactions, then contribute your own posts and make new connections.
- Wall Street Oasis — Visit the Wall Street Oasis PE community, where members upvote and downvote answers to user-submitted questions based on how helpful and informative those answers are.
Attend networking events
In-person and online industry conferences like DealCloud Connect are great for meeting new faces and learning key information like:
- How to cultivate a people-first PE firm
- How to tighten and streamline processes within your operations
- How to build, maintain, and protect a robust and intuitive data ecosystem for your team
Attending the same conference as a potential or current connection is also a great way to build or strengthen a relationship. You can reach out to that person to discuss the conference and what you learned, and exchange stories about your experiences at the event.
Join online private company discussion forums
To meet founders who are looking for private capital, join discussion boards and forums such as Google for Startups and Startup Savant by TRUiC. Be sure to jump in if a founder asks questions like, “Where can I find investors?” or “How should I prepare for a PE pitch?” — and always check to see if that person’s private company matches your investment thesis.
Connect and nurture your relationships
Social platforms like LinkedIn are certainly useful for dealmakers who want to show other PE players that they’re active and engaged in the ongoing conversations surrounding private capital markets trends and headlines. But once a dealmaker connects with someone, it’s imperative that the dealmaker stewards the relationship. The best way to nurture relationships is to adopt a CRM that can meet the PE-related requirements that social networks fail to address.
Schedule a demo to learn how DealCloud can help your firm build a strong, reliable, and fruitful professional network.