LFM Capital Case Study

Even the most successful dealmakers know that directly sourcing deals, refining investment theses, and researching inbound opportunities can be tedious, time-consuming, and altogether painful. With little to no data about non-transacted companies readily available, firms have to sift through the internet for precious ounces of information to guide their sourcing efforts.

 LFM Capital was no exception. Sourcing deals that aligned with their target market and thesis criteria was such a meticulous and time-intensive process that the firm hired up to 10 college interns each semester to do the job. “We would do things like download a list of 100,000 companies from Hoovers and have our interns go through it NAICS code by NAICS code,” says Jessica Ginsberg, LFM’s Director of Business Development.

 So how did LFM go from manually combing through conference lists for hidden gems to increasing directly sourced opportunities by 200% — all while improving productivity by 2.5x?

New School Dealmaking

New school dealmaking harnesses data, technology, people, and processes to take a structured, seamless, and scalable approach to finding and closing deals. Over time, it creates a virtuous cycle in which a firm is able to develop unique market expertise, build a differentiated reputation, and land deals that add significant value to their portfolio.

Becoming a new school dealmaker didn’t just allow LFM’s business development (BD) team to increase efficiencies and directly sourced opportunities. It also helped them achieve:

●     A 295% increase in the number of CRM direct outreach contacts

●     Over 143% more direct contacts with executive-level titles

●     Nearly 110% improvement in high-value target rate

And the best part? You can do it, too. Let’s take a closer look at a few of the ways LFM uses SourceScrub and other new school tools and tactics to deliver exceptional results.

Data-driven Deal Origination

Instead of relying on interns to manually research both inbound and directly sourced deals one at a time, LFM uses SourceScrub to easily access millions of data points on thousands of non-transacted companies at once. Intuitive search functionality and robust filtering capabilities allow the team to find and understand opportunities in just a few clicks.

The tool provides instant insight into companies’ locations, ownership, growth trajectory, executive contacts, and more. “I honestly can’t think of the last opportunity that didn’t originate in SourceScrub,” says Katie Mesha, LFM’s Business Development Manager.

Custom Lead Scoring

LFM’s BD interns used to manually rank companies as high, medium, or low-value opportunities based on thesis fit. “It wasn’t a particularly scientific scoring methodology since one person’s definition of a ‘high-value deal’ may be different from someone else’s,” recalls Jessica. “Sometimes ‘lows’ would slip through and ‘highs’ would get overlooked.”

Now, LFM uses SourceScrub’s Custom Scoring to help rank and prioritize leads by assigning corresponding weights to various attributes like employee range, founding year, and location. “SourceScrub is ‘the science’ behind our scoring methodology,” says Katie. “Now we can combine 'the art’ of ranking deals based on context and experience with an objective, data-driven model, which results in more accurate and consistent scores.”

Seamless CRM Integration

Before SourceScrub, LFM’s BD team was spending considerable time uploading and downloading lists to and from the firm’s CRM. Sourcers would often jot notes down on Post-its or shoot each other quick emails rather than manually enter contact information, inadvertently creating data silos and inaccuracies.

Now, lead contact information, scores, and other data points are automatically passed from SourceScrub to Altvia, LFM’s CRM. Data is pushed back the other direction into SourceScrub as well. Not only does this save the BD team time, but it also helps keep their data complete, accurate,and up to date for more effective outreach.

Intelligent Market Mapping

Sourcing and researching deals often includes the need for LFM’s BD team to map out industries and end markets.“Understanding the total addressable market for specific opportunities and theses — particularly for those that are more niche — is extremely helpful in determining where to invest our time and money,” says Jessica. “But it’s a really tedious and time-consuming exercise that requires a ton of research and digging.”

SourceScrub makes it easier for the BD team to quickly identify potential add-ons and make more informed decisions about which opportunities and theses to pursue by showing them the total addressable investment market in just a few clicks. “We now have a much clearer picture of add-on opportunities much earlier in the deal flow process,” tells Jessica. “This allows us to develop a clear operating agenda from the get-go and ultimately make our offers more compelling and competitive.”

But Wait, There’s More!

These are a few of the ways LFM uses SourceScrub to find and close the highest value deals faster than the competition. To learn more about how the firm is planning conference attendance, building an integrated technology stack, and continuously improving their BD processes, check out the full case study here.

Interested in becoming a new school dealmaker and seeing similar results? Get started when you request a personalized SourceScrub demo.

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Private Equity
Sourcing & Origination
Technology
Posted
August 3, 2021
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