Try doing a quick Google search for "private company data solutions." That's a lot of results, right? New data services are popping up every day offering information and insights for private equity and investment banking firms.
Data is the key to finding more of the right deals faster and consistently out-performing the competition. But not all data is created equal. And without tools to easily get to actionable insights and drive differentiated strategies, data (and the tools that provide it) becomes a commodity.
Unfortunately, zeroing in on a private company intelligence platform that does more than feed you the same static data points and out-of-the-box reports isn't easy. That's why we've created a buyer's guide for dealmakers hunting for the best solution "one that provides high-quality, multi-dimensional data and helps firms harness it in highly purposeful and proprietary ways.
Let's dive into a few of the criteria that distinguish the best options.
Most data service providers have information about private companies. But this statement can be misleading because private companies fall into two buckets:
While there are about 50 thousand investor-backed private companies on the market, there are more than 30 million bootstrapped businesses. Pre-transacted private companies not only represent the biggest pool of opportunity for investors, but they also offer the greatest potential returns.
However, founder-owned companies are the hardest to identify and understand. It's critical that any private company intelligence platform you choose not only provides information about investor-backed private companies, but also data about pre-transacted businesses.
As a dealmaker searching for a private company intelligence platform, you already know that it's no longer adequate to depend solely on networking and intermediaries to find and close deals.
The best firms "and tools "leverage data to facilitate, accelerate, and improve relationships, not replace them. Find a solution that goes beyond basic firmographic data and provides signals like new hires, conference attendance, and media coverage.
These "compelling events" can be used to personalize direct outreach and nurture relationships with early-stage opportunities. Some private company data providers will even alert dealmakers when they detect updated information regarding these target companies, so teams can strike while the iron's hot.
Many data service providers boast about natural language processing and machine learning functionality that deliver "intelligence" to dealmakers. Unfortunately, this brave future hasn't fully arrived. "There's no magic, and there isn't generally available AI that will solve everyone's problems," cautions Sourcescrub's own Data Scientist John Lucas.
The most reliable insights are generated when humans and technology work together to collect, structure, and verify data. That's why the best private company intelligence platforms involve knowledge workers in their data scrubbing process, rather than relying solely on artificial intelligence.
While there's no silver bullet for selecting the perfect private company intelligence platform for your firm, there is a series of questions firms can ask to help narrow down the playing field. Want to learn more about the 3 secrets we touched on in this post, plus several other factors firms should take into consideration when researching these solutions?