A thorough look at the top origination and research platforms used in PE and VC
Software enabled deal sourcing has become more commonplace in recent year with a number of platforms claiming to use data science and machine leaning to generate better top of the funnel ideas for PE investors. In this article, we wanted to pull a comprehensive review of the top platforms out there on the market (as of Q1 2022), including their pros/cons and prices:
1) Top of the Funnel Identification of Potential Targets
Believe it or not, there was a time when PE associates spent countless hours browsing through the attendees of the “2011 Agriculture & Forestry Conference” to generate new leads. That era is now in the past with bespoke platforms that allow to automate scraping and classification of privately owned companies:
SourceScrub - The more established of the two companies, having been founded in 2014 by Tyler fair, who has previously build a bespoke origination solution for his employer (Serent Capital). Great industry classification features and ability to search companies based on past conference attendance.
Price: $30-40k + for entry level license
Grata – Company origination platform with a strong focus on US mid-market PE in particular. Started in 2016 by two Harvard grads, one of which had previously worked at Riverside. Similar feature set to SourceScrub. A younger, less developed platform, however at a lower price point.
Price: $15-20k entry level license
2) People Intelligence and Management Due Diligence
So you've shortlisted 50 target companies and now you need to screen, profile and find potential angles in the C-Suite to build a real deal angle.
BoardEx – the original people intelligence platform that started out in the pre-LinkedIn days of 2001 and build its reputation by offering clean data sets board members for listed US companies. They have since expanded their focus to private and middle market assets as well, however tend to struggle to have a broad appeal due to the very premium price points
Price: $25-50k, depending on size and client tier
listAlpha – the much better and cheaper version of BoardEx (but we are obviously biased). Founded in 2020, the platform allows to see the organisational chart of private companies along with identifying key ex-employees, which are useful for expert calls and adviser approaches. The software also allows you to find potential connections or angles into the C-Suite to enable intoductions.
Price: $15 per user per month for listAlpha Pro; $85+ for Enterprise version
3) Generic Company Intelligence Platforms
These platforms cover the standard firmographic information helpful in screening and desktop research (e.g., HQ location, size, employee count, capital raising rounds, senior management, financials, etc.). Most users use these platforms across the deal lifecycle - for early stage screening and basic due diligence.
PitchBook - The most premium of the three in this category used for mid market PE, Growth and VC investing. The platform also offers industry thought pieces and market maps, which are helpful for sector research
Price: $25K+ for entry level package
Dealroom - Similar to PitchBook, but more limited functionality and focus on VC
Price: $10-20k for entry level package
Crunchbase - The freemium version of Pitchbook. Don’t expect any proprietary deal flow here, however as a basic research and screening tool - this platform is great. More applicable for VC and growth rather than PE.
Price: Freemium with a pro subscription at $30 pm
2) Integrated Financial Data Platforms
These platforms focus their attention in the realm of Investment Banking and M&A and offer primarily structured financial data for listed companies and securities (e.g., bonds, commodities, etc.). In PE, they are more applicable to the large cap side of the market, where valuation analysis is more relevant (e.g., take-over situations) and listed competitors are generally more common. These are industrial grade platforms (e.g., Factset employs 10k staff globally) with extensive data feeds, API connections and Excel plugins, however they do tend to suffer from an ageing user interface and tech stack given just how long they have been around.
CapIQ - Founded in 1999, Capital IQ started as a provider of software and analytics related to public markets. It was sold to McGraw-Hill Financial in 2004 for more than $200 million and has since been part of their portfolio. Not as robust as Factset in terms of functionality, but is considered a standard entry level piece of software for any financial institution no matter the size. The user interface has not aged well and is slowly starting to resemble a mix of Bloomberg and Windows 95.
Price: $15-20k for entry level package
FactSet - Founded in 1978 (!) in New York, the company has grown into a very diversified platform with $1.6bn of revenues (as of FY20) and a number of products catering to both buy side and sell side of the market. Very strong excel integration functionalities, which make it a standard choice for investment banking M&A departments (which then as a result gets frequently carried over into PE funds who hire from those banks)
Price: $30k+ (more premium that CapIQ)
To lean more about how to use listAlpha for PE origination and screening, check out our Private Equity portal.