In the category of software I can’t live without, PitchBook is near the top.

The company was acquired by Morningstar a couple of years ago and they’ve continued to invest heavily in the platform.  The user interface is very straightforward.  I only have 2 complaints – they limit the amount of data you can download on a daily basis (usually your account rep will help you out on a one-off basis) and the price.  It’s not cheap . . . but nothing good should be!

They recently interviewed my team to highlight how we use the software.

I thought sharing it with others would be helpful for those considering becoming a PitchBook customer.

Click the link to read more – Saratoga Pitchbook Case Study

A few months ago, an old college roommate that I don’t see often came to visit me.  My friend builds very high-end systems that help the world’s largest retailer predict which deals they should present you based on the multi-variable behavioral traits they have accumulated about you.  These systems use incredible natural-language capable “bots” which evolve into better workers the more human interaction they have.

It was a fascinating conversation and got me thinking about AIs future influence on the world of private equity.  Obviously hedge funds have used very sophisticated AI algorithms to parse through terabytes of data enabling them to make better investment decisions.  Could our back office, deal execution, and business development teams all be replaced by (gulp) an artificially intelligent computer?

Today the answer is no.  However, Bloomberg recently ran an article about how “AI is laying a claim to the future of investing after many false dawns going back decades.”  It’s now becoming understood that they make clever work partners when coupled with the situational perception that human can readily add.

Chris Mims of the WSJ wrote an apt titled piece called Without Humans, Artificial Intelligence Is Still Pretty Stupid. In it he argues that AI will work together with humans but that our role will be to help AI work better.  “Whether it’s winning at games like Go or keeping watch for Russian influence operations, the best AI-powered systems require humans to play an active role in their creation, tending and operation. Far from displacing workers, this combination is spawning new nonengineer jobs every day, and the preponderance of evidence suggests the boom will continue for the foreseeable future.”

So what are some of the best AI enabled tools business development professionals can use to generate more deal flow?  Some of them are probably well-known names. [Read more…]

Legendary investor Ray Dalio’s new book Principles is a great read and recommend it anyone seeking to understand how to build more process in life. In it, Dalio says that he believes the single most powerful process in the universe is evolution.  This follows a major theme in his book — that we learn the most about ourselves through our failures, not our successes.  It is the same with evolution, which is shaped more by lessons of failure than status quo success.

When you look at nature you’ll see that our world is actually a patchwork collection of ecosystems, linked together for a surprising mix of versatility and durability.  My oldest child is studying biomes in science class which perfectly illustrates this “networking of nature.”  This topic is studied extensively in Mark Buchanan’s book Nexus – Small Worlds and the Groundbreaking Science of Networks.  Buchanan does a fantastic job illustrating how small network theory is demonstrated throughout our world.

So as humans, who have made it through our own evolutionary gauntlet, we now find ourselves working in today’s private equity ecosystem.  As a business development professional, my thriving or failing largely results from the strength of the relationships within my network.  Small network theory has some interesting implications for all of us. In fact, it can provide a template for effective networking, strengthen your existing network, and help you identify the most efficient prospects to target. [Read more…]

I’m a 20 year veteran of the private equity industry.  I know what works to generate deal flow.  I will always share how the best private equity professionals originate more deal flow.  That’s my focus and passion.

I review at least 1,000 private investment opportunities per year.  I balance deal turn downs with deploying capital.  My days are filled with meeting new prospects, taking care of existing clients, and pushing deals through our pipeline.

So how do I do it?  First, private equity professionals need to be very cognizant of their “highest and best use” of time management when sourcing and executing. As many veterans of PE BD know, the worst use of time is getting bogged down with a laundry list of administrative tasks versus being out trying to find new investment opportunities.

How do you reduce the time you spend on admin tasks and focus more on bringing in more deals for your execution team to review?

Know Your Flaws

Do you get distracted with your inbox or your social media feed? Are you constantly switching between your project management tools, your CRM tools, and your email accounts? If so, you’re killing a lot of time.  My number one recommendation to BD people is to turn off your email alerts.  They are complete distractions.  Stay focused on the task at hand.  Check email 3 times per day.  First thing in the morning.  Midday.  And lastly, at night.

Little tasks that aren’t compartmentalized are sneaky time wasters. In isolation, none of them seem to take up too much time, but they do. But when compounded, it’s difficult to recover from the loss of productivity.

A report by the Federation of Small Businesses (FSB), says small business owners are spending more than 33 hours a month handling internal admin tasks. 55% say this is causing a lag in business growth. As you might expect, accounting tops the list of major time wasters with up to 14 of the 33 hours. Business banking takes 9 hours, taxes 6 hours, and HR and employee care take 5 hours.

Here’s how I maximize my efficiency:

Schedule Your Entire Life on Your Calendar

I worked in a sales role earlier in my career.  One of my bosses used to harp on planning. The mantra was “Plan your Day; and Execute Your Plan.”  Trust me.  This is the best sales advice I’ve ever learned.

Move your to-do list to your calendar.  That’s how you get things done.

Do you still use spreadsheets (or worse yet, a pen and paper) to schedule? In case the schedule changes or someone gets sick, you always have to adjust it manually.

This is a huge amount of work––and it’s unnecessary. It doesn’t have to be like that.  Use the great technology of MS Outlook and learn how to automate and create shortcuts.  Learn the shortcuts available in MS Outlook.  They will make your life easier.

Today anyone can create a robust scheduling solution that ensures you and your staff are working on projects they enjoy instead of wasting time on admin tasks. One way to achieve this is through an enterprise scheduling app. Look for an app that suits your business in terms of size and needs. [Read more…]

We all know the world is increasingly networked and connected.  And businesses realize the importance of using compelling content to attract clients and opportunities.  Yet business development pros working in PE have been slower adopters of social media marketing.  Despite what traditional deal professionals may believe, social media enables private equity firms to more efficiently generate a steady flow of investment opportunities.

Here’s why I think social media is a valuable asset to your investment firm:

Strengthen your deal flow

Researchers have studied how social media can be a valuable tool for deal professionals. In a 2010 study conducted by Harvard Business Review, researchers concluded that social media boosted deal flow because it made investors more aware of others and the types of deals they were seeking. Sharing deals and investment opportunities encouraged others to do the same.  Investors pooled their opportunities which allowed them to access deals that they otherwise would not have been aware of.

Personally, I’ve followed this “give-to-get” mentality and it has helped me become a prolific business developer with a robust referral network.  Our platform expects our deal sourcing machine to uncover 50 to 80 opportunities a month.  My need for reliable and recurring deal flow has never been more important especially given the competitive nature of today’s market.

Improve your new business outreach

Another advantage of social media is that it can be a passive form of outreach. Email blasts can be intrusive and spam filters do a better job than ever keeping salespeople out of your inbox.  However, once you establish your expertise and develop an online presence, the content you develop and curate while help interested parties seek you out, rather than the other way around.

If this sounds too good to be true, it isn’t. Take Chicago-based Parker Gale, a PE firm that produces a great podcast with a cult-like following.  Their PE Funcast (click here for podcast) sees regular updates, sometimes as often as five times a week.  Topics seem to always remain relevant, touching on a range of questions from the value of getting an MBA to evaluating and developing portfolio companies. To date, PE Funcast has more followers than Parker Gale’s own Twitter account.  This is proof that content marketing remains key and should be part of any social media strategy. [Read more…]