A COMPREHENSIVE MARKET REVIEW OF DEAL FLOW AND RELATIONSHIP MANAGEMENT SOFTWARE AVAILABLE FOR PRIVATE EQUITY AND VC
The private equity CRM software market can be broken down into three broad groups, which also correspond to the distinct time periods in this industry's history:
Chapter 1. Best of Breed Modern Platforms
Tech-forward platforms with latest relationship intelligence capabilities and API integrations
Founded in London in 2020, ListAlpha is one of the few newcomers that have entered the PE CRM market in the past decade with a brand new tech stack. The platform is focused on deal team / front office workflows and differentiates through a modern and light-weight user interface, API-led approach, minimal data entry requirements and powerful AI-search capabilities. ListAlpha also has unique relationship management functionality that allow to track interactions with key advisers and deal makers.
Pricing: $20-30k annual license fee for team of 30
Strengths: Modern tech stack; Light weight user interface; Disruptive pricing model; Strong API integrations with leading deal origination platforms
Weaknesses: Focused product feature set targeting deal team and front office users only
Founded in San Francisco in 2014, and backed by YC, Affinity has been one of the most successful deal origination platforms of the recent generation. The platform was built around native integration with email providers (Gmail or Outlook) and differentiates through strong Relationship Intelligence functionality. Affinity has strong traction among Venture Capital funds, however has had a more limited relevance in the Private Equity market due to the specifics of that customer segment.
The platform is focused on deal team / front office workflows and differentiates through a modern and light-weight user interface, API-led approach, minimal data entry requirements and powerful AI-search capabilities. ListAlpha also has unique relationship management functionality that allow to track interactions with key advisers and deal makers.
Pricing: $20-40k annual license fee for team of 30
Strengths: Modern tech stack and user interface; Strong Relationship Management and people intelligence functionality
Weaknesses: Very VC-focused workflow, slightly inappropriate for private equity (i.e., heavy focus on outbound origination and long lists of contacts)
Chapter 2. Full-Suite players that offer CRM functionality
Expensive and painful to use, however a decent choice if you are looking for a one-stop shop
These players came as a second wave of industry-specific software providers that customized their workflows to the Private Equity market, thus avoiding the pitfalls of the generalists. The most established of this cohort are Dynamo, eFront and Backstop which were all founded in 1998-2003 and have since reached significant scale. The newer entrants include DealCloud (which is arguable the best of this group) and Altvia (which is based on the SalesForce platform, hence suffers from the earlier mentioned issues).
One of the best known names in the industry and a slightly more front office-focus than the rest of the group. DealCloud was started in 2010 in North Carolina by two founders with previous private equity experience. The company has 250+ employees globally and has been recently (2018) acquired by Intapp, a legal software business.
Pricing: $50-70k license fee for team of 30 + $30-50k in integration / set-up costs
Strengths: one of the biggest names in the market with good visualisation and analytical features
Weaknesses: Very manual and data entry-heavy workflow which bogs down the deal team; Expensive and cumbersome to install / maintain; Old and ageing tech stack.
Founded in Colorado in 2006 by Kevin Kelly, who previously was a CTO at another private equity fund. Over 15 years, the company has scaled to over 40k users and completed a sale to Bow River Capital in 2019 and subsequently Marlin Equity in 2022. Altvia offers a full-suite CRM however differentiates through a focus on Investor Relations functionality (e.g., LP communications, fundraising, virtual data room, etc.). Their platform is built entirely on SalesForce, which gives rise to a number of disadvantages when it comes to the user interface and flexibility of the software.
Pricing: $70k license fee for team of 30 + $40-50% for integration / set-up costs
Strengths: Full-suite solution. Strong LP / IR features.
Weaknesses: Built on top of the SalesForce platform, which limits ability to add new features; Lack of control over their own core infrastructure. Old school user interface.
Chapter 3. Generic industry CRMs
Generally a bad idea, unless you are already stuck with them
Despite their respectable age, the likes of Salesforce and MS Dynamics continue to feature on various software vendor lists for private equity, slightly to our bemusement. These are very large and generic sales platforms designed for industry customers (think manufacturing or life insurance companies), which have been "shoehorned" into serving PE clients by various industry integrators.
The problem with generic CRM platforms is that they are fundamentally designed for supporting the sales and customer service functions of medium to large corporates (think thousands of employees). On the size front, this stands at odds with the fact that even the largest mega funds have at most hundreds of employers (if not less than a 100). These platforms also don't deal very well with the fact that PE funds do not have customers, or sales people. Shoehorning these CRM platforms inevitably involves introducing slightly alien concepts like M&A advisers and deal pipelines, and turning off the multitude of "Work In Progress" and "Quarterly Sales Quota" reports, which as the bread and butter of the Saleforce customer base.
These platforms are generally cheap (HubSpot is free, Dynamics is c.$10-20k depending on team size), however installing them in 2023 is akin to sending your organisation back into technological dark ages.