Blogs
— 3 min read

Armed with record amounts of dry powder, private equity firms are actively competing for deals and going head-to-head with corporate strategic acquirers, who may find that their traditional means of sourcing and tracking opportunities has put them at a distinct disadvantage in today’s market. 

These corporate dealmakers will need to strengthen their technology capabilities if they’re going to find high-quality companies, build relationships with founders, and ultimately win out over private equity firms that have steadily increased their technology spending. 

For now, corporate dealmakers’ tech stack does not stack up.

Relationship Nurturing

Post-pandemic, PE firms doubled down on technology spending, and tech budgets are expected to keep rising each year, according to Private Equity Wire. But data suggests their corporate counterparts haven’t followed suit.

Courtesy of Aaron M. Polack, Head of Business Development at Lion Equity Partners

A survey of corporate development teams by private equity firm Lion Equity Partners revealed that almost 60% of respondents are still using Excel to track their deal sourcing pipelines, and an additional 12% are not formally tracking those opportunities at all. 

When it comes to company research or target communication, strategic acquirers are losing ground and will start losing more deals without a single source of truth. Corporate M&A teams need to start investing in technology to ensure communication is clear between employees (connecting “boots on the ground– a company’s sales and customer service teams–with the corporate dealmakers) and to ensure that the pipeline is strong by nurturing relationships.

Attending to founder and CEO relationships at any stage of the deal life cycle requires highly personalized, high-touch interactions that technology can’t replace. But corporate development teams can use tools to support the efforts of courting a company before it’s ready to seek investors. Many turn to email marketing software such as Mailchimp to assist in the segmentation and personalization of their outreach. 

Automated signals can help teams determine when and how to best contact CEOs. A platform with automated B2B search capabilities can help improve this process by sending alerts based on certain triggers, such as a funding round or the addition of a marquee name to the company’s board or leadership team. 

By having all this information consolidated in one place and taking advantage of real-time notifications, corporate dealmakers won’t go several months without engaging targets. They can make prospect nurturing a routine part of their workflow.

Onward and Upward

Technology-driven data and research are critical to optimizing the deal life cycle. Corporate development teams need these capabilities, along with companion integration and services, to drive successful inorganic growth. At Grata, we’ve created a private company intelligence engine with all these capabilities to help firms discover comprehensive company data and unlock the middle market. 

By leveraging the right technology and services, corporate M&A teams can achieve market-wide visibility, and automate prospect identification, nurturing and outreach, while performing comprehensive due diligence and closing the right deals even faster.

Nevin Raj is the chief operating officer and co-founder of Grata, a private company intelligence engine for middle-market dealmakers.

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