Introduction
Deal support campaign is an effort to locate targets for accelerators, angel investors, and venture funds looking to invest in ideas and smaller firms. It is an integral part of the deal origination process. The sourcing of investment possibilities by private equity (PE) companies, venture capital firms, and investment banks is known as deal origination. It is the initial phase in making a transaction and entails producing deals to offer to possible purchasers. Effective deal origination is the basis of successful investing. Deal origination firms ensure that the company doesn’t miss out on worthwhile investment opportunities. It also scans the industry for the most significant sales opportunities to meet the investment objectives.
Deal support campaigns have made the deal origination process more accessible and systematic. These platforms also provide a customized experience to the users by researching and listing deals and maintaining a record of all transactions between them, enabling them to view the transaction history before closing a deal.
Importance of Deal Support Campaigns
Firms in the financial services industry are constantly evolving and growing. Financial Services companies must be able to adapt and fulfill their changing needs. The business clients are looking for goal-oriented planning, proactive insights, individualized outreach, etc.
Deal support campaigns provide appealing chances to uncover prospective companies early in their lifecycles, far ahead of the competition, resulting in a robust proprietary transaction flow. It concentrates on identifying possibilities directly related to their goals and investment thesis, resulting in higher conversion rates. Prequalifying leads through research saves time by preventing companies from wasting time on leads that aren’t relevant to their investment thesis or industry focus. Data-driven deal support campaigns entail gathering the information needed to deliver customized outreach and pitches for each customer, allowing the company to stand out from the crowd.
Strategies for Deal Support Campaigns
Strategies for deal support campaigns
Deep Targeting
Deal sourcing strategies are tailored to a single specific demand through deep targeting. It involves making an attempt to reach the appropriate audience. It contains thorough background information about the investor and the businesses they invest in. Through online deal sourcing, both the buyer and the vendor can connect with a wider, more geographically distributed audience. The platforms serve as a non-geographical means of bringing together financiers and investors who share similar beliefs, aspirations, and objectives. Make connections with potential venture capital partners and lead the round of fundraising with other participants. Therefore, in order to locate transactions, it pays to develop and maintain good relationships with other venture capital firms.
Filtered Target
To make deals easier and more convenient, it gives filters that include general lists and allows indexes to focus on. Not only that, but one may also create blocklists of candidates who aren’t a good fit for you. It can help with segmenting, allowing you to generate more successful leads. It provides you with the right kind of investor as per your need.
Integration of an email API
It can make their emails and messages appear as if they were customized and sent directly from the account by using API. This demonstrates their enthusiasm and aids in developing a positive relationship with the prospects. The data is time-stamped, which aids in calculating conversion rates and managing performance at any point during the deal sourcing process.
Data-driven
It places a premium on prospect interaction for deal support campaigns. Data-driven deal sourcing, on the other hand, analyses data to identify potential investment prospects before reaching out to or engaging with them. It is often employed in outbound efforts and works best when combined with relationship-driven and in-person deal sourcing tactics. A shared network might lead to data that can help businesses generate more tailored interactions with opportunities, providing them with a competitive advantage. The conversion rate increases because the message is customized to the right audience.
Types of Campaigns
Deal support campaigns play a crucial role in identifying, acquiring, and maximizing the value of investments. Here are some types of deal support campaigns specifically relevant to PE and VC:
Types of campaigns
Equity campaign
The primary approach to investing in a business is through a regular equity campaign. You choose the company you wish to invest in, and if the campaign meets its financing goal, you become a stakeholder in that company. The shares increase in value as the firm grows in importance, allowing them to participate in the company’s future success. It offers two types of equity campaigns: primary and secondary, with direct campaigns accounting for most equity campaigns on the Seders platform. A primary campaign is one in which the company issues equity by issuing new shares. A secondary offers shares from existing shareholders.
Convertible campaign
Businesses frequently employ convertible campaigns when a huge fundraising round is on the horizon, but they need to seek funds for a smaller project in the meantime. By selling a convertible, the corporation avoids having to value its company right now, potentially hurting future investor discussions.
It allows you to invest at a discount to other investors, changing your investment into equity in the future. This is a standard arrangement used by angel investors and venture capitalists worldwide. When the convertible converts to equity in the future (often when a new round of funding is announced), it will be converted based on the discount to the valuation at the time of the latest round of funding, which may be subject to a maximum value (known as the “Valuation Cap”). Before investing, strongly advise potential investors to familiarize themselves with this document.
Cohorts Campaigns
Investing money into a cohort campaign enables you to click once to make many investments. Upon investing in a cohort campaign, you acquire ownership stakes in every one of the underlying companies selected by the campaign manager. The campaign organizer discovers the startups and often provides them with mentorship, assistance, and direction (e.g., by running an accelerator). The secret to successful equity investing is diversification, which you can achieve with a cohort campaign that also gives the firms extra help and support.
Funding Campaigns
Less popular fund campaigns allow you to invest in an investment fund through Seeders. It will support you as a limited partner in the investment fund, and it will hold your interest in the fund on your behalf. Unlike a cohort campaign, you will receive an interest in the fund rather than shares in the underlying firms.
Timeline of Deal Support Campaign
Whether the firm meets its minimum or maximum funding objective, each startup campaign will run for a predetermined period. There is a start and end date, and Investors can continue to invest until the listed end date, even if the firm has met its funding objective startup meets its minimal funding objective before the deadline. Under specific circumstances, startups can extend or abbreviate their campaigns. It also has an option to do a rolling close. If a startup meets its minimum financing target before the campaign’s end date, it can choose to extend the drive and collect the monies raised to that point. This must be disclosed to investors promptly.
Conclusion
For many investment bankers, venture capitalists, and private equity companies, finding the ideal deal support is the missing jigsaw piece. It is a step in the deal origination process that is used to identify and target prime investment opportunities. If someone does not use a private corporate intelligence platform, researching offers online may be difficult and time-consuming. Online sourcing initiatives without data-driven personalization may appear unpleasant. Without the assistance of reliable data service providers, a deal support campaign might result in inconsistent or obsolete information.
Magistral Consulting’s Services on Deal Support Campaign
Screening Targets- SOP-based
Standard operating procedures (SOPs) are created for the customers to meet the needs of Private Equity clients during the deal origination and deal sourcing process. Once all the complex operations have been established, the customer is asked to sign off on the project.
Industry Tracking and Landscaping
It is essential to take advantage of new trends. It should keep a close eye on its major markets, regions, and industries. Magistral Consulting has helped track industries like healthcare, blockchain, cybersecurity, heavy engineering, and many more.
Potential Target Identification
A list of potential eligible targets is compiled using secondary and primary sources. Databases are secondary sources, whereas industry organizations, accelerators, and angel investor clubs are the primary sources.
Target Pipeline Management
Magistral consulting can manage the process of Incoming sales opportunities and track through several phases of the lead’s journey until they are eventually closed.
Marketing
Magistral consulting helps in Case Studies, Thought Papers, and white papers and does Impact Analysis, and Sustainable Investing.
About Magistral consulting
Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research
For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact
About the Author
The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com