Five signs your private equity CRM platform is not the right fit

As part of ListAlpha's launch, we have met with hundreds of investors who have reached out and shared their customer stories and frustrations with their current software. Below is a summary of the most common things we have heard, which serve as a good guide of whether your CRM platform may or may not be the right fit for your firm:

1) The senior investors do not track their own deals or contacts

This is the most common problem - the partners and directors are simply too busy to use clunky and time consuming legacy platform. As a result they ask the Associates and VPs to enter the information. Those in turn ask the Analysts, who then ask the Assistants… and this is how the death spiral begins.

The reasons the partners are not tracking their own deals in your CRM is not because they are too busy or too senior - it is because they get no value from that activity. If the point of logging into the system to comply with the formal process or to fill out a report - no sensible individual will subject themselves to that. However, if when tracking a deal the partner can learn about the target's financials, previous funding rounds, quality of the management team and potential investments risks - the value of tracking the deal is completely different.

Find a system that is built for investment professionals to do deals, not for creating reports or PDF files.

2) Deal team uses excel spreadsheets to track their pipeline

This is one of the most ironic symptoms we see. As a fund, you have spent $100k+ and months of work on the new CRM and after all that work, the team prefers to use a free spreadsheet over the fancy platform? Something has gone clearly wrong.

Simplicity and automation is key to solving this. Tracking deals in software should be easier not harder than doing it in a spreadsheet. Time to switch vendors or go back to simpler methods, which with the right process and focus, can last a surprisignly long time.

3) The CRM platform vendor is forcing you into a 3-year contract

In today’s world, there is no reason why you should sign a contractual obligation to pay someone for 3 years in a row. This is not a real estate office lease - this is software. If their platform is great and their users love using it, why would the vendor need to force such a strict financial commitment up front?

There is only one reason - they know you will not be happy with the platform and want to leave. Choose vendors that can back up their platform with strong customer success teams and who will keep fighting to keep your team happy every month of the year, not just when they are selling. Never commit to a multi-year contract - a quarterly or annual rolling contract is the best.

4) The investment team does not take notes on the platform

The investment process generates a tremendous amount of valuable information "exhaust". Deal gossip from an M&A adviser on an upcoming transaction. Expert call interviews with GLG. Market insights from a truster CDD adviser on the target sector. All of these insights should live on the deal platform and not in OneNote or Evernote or Notion.

Valuable deal information allows investors to pick-up transactions two or three years down the road and to benefit from the full previous context. Unfortunately, most of the legacy CRM players do not offer a powerful note taking module and thus investors (particularly younger ones) will typically use a generic product from the operating system - e.g., MS OneNote.

5) Associates ask: “Do you know anyone at [McKinsey/ Bain/ Lincoln/ Jefferies/ Goldman, etc.] who knows this space?”

This is a clear sign that your firm does not have a centralised repository of advisers with the profiles, strengths, industry tags and deal experience. This is one of the most important jobs of an investment fund is to collate the collective experience and centralise it in a knowledge pool (not inside of peoples heads - as they tend to leave).

A top decile fund represents collective years of experience working with M&A advisers, CDD advisers, CEOs founders, non execs, etc. That accumulated digital rolodex is the very competitive edge that allows investment teams to beat others in a competitive process and is extremely important to maintain.

If any of these do ring true - please don’t hesitate to get in touch. We built ListAlpha with a very clear goal - to solve the above-mentioned  issues and our team will be happy to demo the platform for you.

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