How to Improve Your Deal Flow Management Process

A private equity professional reviewing a deal flow management process on her tablet

The venture capital and private equity space are constantly changing. That’s why investment firms and related entities need a solution to keep track of the flow of their investment opportunities. Otherwise, the deal flow management process could quickly get out of hand.

From our experience working with the investment community, we have found that many firms do not have a true solution that streamlines their day-to-day activities and offers real-time, robust reporting. Unfortunately, many firms still rely on Excel spreadsheets to support deal tracking, which results in a higher potential for error, a lack of visibility, and difficulty updating stakeholders on the status of each deal.

It’s time to regain control of deal flow management. Finlyte can help. Let’s take a closer look at the fundamentals of deal flow, how to better manage the process, and the expected results when your firm implements a proven approach.

What is Deal Flow Management?

Deal flow is the rate of incoming deals that could be potential investment opportunities for a firm. These leads may come from other investors, word of mouth, pre-existing networks, or ongoing relationships.

A key indicator of a successful fund is the quality of the deal flow. Both volume and quality are imperative factors when measuring the strength of a firm’s deal channel. The challenge is that the standard conversion rate is only 1% across venture and private equity firms, so finding numerous first-rate opportunities is critical.

  • High-quality leads are essential.
  • Low-quality leads waste resources and time.
  • These risks can ultimately threaten the health of a fund over time.

Without access to a centralized location to track each deal, investment firms waste a lot of time chasing the wrong leads and not pursuing the right deals. Utilizing a deal flow management tool will give your organization a better picture of your pipeline so that you can access one source of truth to make informed investment decisions.

Consider how Finlyte can support deal flow management for your firm through our ION (Investment Optimization for NetSuite) solution.

How ION Illuminates Your Deal Flow Management Process

Through ION, your firm will benefit from a streamlined approach to deal flow management.

1. Access Robust Management Tools

  • Track potential investment targets.
  • Use one cloud record for all evaluations, KYC/AML, and ESG reporting.
  • Forecast capital requirements and allocations by industry and ESG criteria.
  • Provide hindsight performance reporting on buy-side leads and managers.

2. Simplify Complex Accounting Processes

  • Eliminate cumbersome spreadsheets that slow down processes.
  • Reduce overhead maintaining complex or inefficient accounting/reporting practices.
  • Introduce automations to disentangle your team from tedious accounting tasks.
  • Streamline every aspect of deal flow management for accounting purposes.

3. Support the Needs of Financial Stakeholders

  • Provide clear visibility into the status of each deal for relevant stakeholders, managers, investors, and executives.
  • Generate reports at the level of detail required by each stakeholder.
  • Provide a high-level summary and detailed transactions for each individual investor.
  • Utilize cap tables to split distributions across investors.

Talk to Finlyte About Optimizing Deal Flow Management

Choosing a deal flow management system that can store all communication and records for potential leads and current investments is key to staying organized and on the right track to pursue the highest quality leads.

In addition, having a centralized system creates an environment for collaboration amongst key stakeholders. ION provides your firm with the best of both worlds. Now is the time to take advantage of a world-class accounting system and an investment platform that will allow your organization to scale.

Deal flow management optimization will ensure you have visibility into the best possible investment opportunities. Schedule a demo today to see how ION can accelerate the deal flow management process for your firm.