Finding amazing investment opportunities takes time and effort. Networking, traveling to conferences, phone calls, emails, and more are all necessary components of making a deal. But even getting to those activities takes research.
That's why private equity tools and technologies that streamline the category and company research process are among the most important components of a successful private equity firm's workflow. And choosing the solutions that will get you the most - and the most accurate -information is key.
In this article, we'll take you through a few key features these tools should have, examples of the best research tools for private equity that are on the market, and then detail these solutions' pros, cons, and costs. Let's get started.
A reliable research tool for VC and private equity firms requires several key components to be worth the cost. However, different features will be more important than others based on your firm's particular focus and goals. It's also important to note that it is normal for firms to use multiple research tools, since each tool brings something different to the table.
Regardless of how many or which exact tools you use, keep an eye out for the following ten features that firms tend to find the most helpful:
A research tool must provide information about competitors and the market you're analyzing so you know where you stand and how to outperform the competition. Information is power for a firm, and research tools should provide the necessary information for comparing and contrasting different companies as potential investments.
It's important to be able to organize and contextualize data so you can analyze it and make logical deductions. Research tools that allow for easy reporting and chart generation help you to "show your work" in pitch meetings and create easily visualized models of relevant information about valuation, hiring, sales, and more.
Tools that allow you to build a model or hypothesis and then evaluate prospects based on what's important to your goal are highly effective at finding and evaluating ideal targets. Functionality like this is essential to creating and testing theories about a prospect's performance, and helps firms standardize proprietary strategies that supercharge deal flow.
There's a lot of information to track when sourcing deals and monitoring targets, and automation can help lighten your team's load significantly. For instance, some tools allow dealmakers to set automatic notifications each time a tracked company goes public or a top target announces a new hire, for instance. These configurable alerts help you stay informed, on top of prospects and portfolios, and ahead of your competition.
A solid contact database helps you keep track of and talk to the right people. When these databases are searchable, allow for the recording of contacts, are verified as reliable, and are interdependent and relational, it empowers your sourcing team to quickly connect with prospects, see people's professional backgrounds, and discover other connections.
It's time-consuming to manually scan through lists and databases and sort out what's relevant from what's not. Research tools that offer advanced search and filtering functionality stand a cut above the rest. Dealmakers will be able to discover hidden gems, easily navigate across data dimensions, search for "look-alikes,"¬ù and browse buyer's guides, conferences, and investor portfolios with ease.
Data is everywhere, but clean data is essential for actionable insights. Data integrity can make or break a PE firm's technology stack, so tools that constantly verify and validate data are essential. Good research tools will have AI doing the heavy lifting to source good data and pair it with data experts who work to normalize, edit, and assure the quality and integrity of their data.
The best research tools for private equity should offer a number of pre-built integrations with other top private equity tools. This ensures that none of the research your team is doing gets stuck in a silo, that it can be combined with information from other sources, and that it's easy to take action on. A robust API is also helpful for when an out-of-the-box integration doesn't exist.
Historical trend tracking allows PE professionals to see the overall performance of a prospect and whether now is the right time to approach them for a potential investment. Past performance can be an indicator to predict their trajectory and determine if they are a prospect that fits your investment thesis.
Any good research tool for private equity and VC firms should have collaboration options so all parts of the firm can be strategically aligned to achieve your goals. Features such as firm-wide tagging allow you to organize work and prioritize who is doing what. Workflow dashboards can also highlight team activities, making cross-functional work easier throughout the firm.
While there's no shortage of research tools available specifically for private equity and venture capital, it can be overwhelming to sort through them and select which one is best for your firm. In addition to specific features and capabilities, an important aspect to consider is the tool's area of focus.
Many research tools will fall into one of these five categories:
Below are some examples of the best tools within each category.
Private companies make up the vast majority of investable opportunities on the market - but the information dealmakers need to identify, engage, and win these companies is scattered and scarce. This traditionally required firms to manually scour the internet and piece it together, but tools like the following save significant time by surfacing accurate and relevant data about these companies in just a few clicks:
Sourcescrub is the market-leading AI-powered deal sourcing platform for investment and M&A firms looking to research, find, and connect with founder-owned companies. Sourcescrub provides deal-ready data, purpose-built tools, and on-demand experts-in-the-loop to give firms a decisive advantage so they never miss a deal.
What Clients Say: Sourcescrub clients report a high level of satisfaction and private equity clients return on average 8.3% more than their peers.
Pricing: Variable
A powerful analysis tool for startups and other private companies, CB Insights offers real-time information about the health of VC and angel-backed startups and integrates with LinkedIn, Salesforce, and Active Directory. It also has analytics functions for analyzing quarterly earnings calls, with detailed records of comments, questions, and discussions.
What Clients Say: Clients praise the cleanliness of CB Insight's data, as well as how expertly it keeps up with emerging trends and processes a wide variety of data into accessible and actionable forms.
Pricing: 30-day free trial. Pricing available upon request.
Pros
Cons
PitchBook is a suite of applications that provide data on private and public markets, tooled toward giving insight into private market intelligence, fundraising, investment sourcing, business development, and networking. With more than 18,000 clients, Pitchbook is one of the more popular tools in the financial world, especially in deal origination research.
What Clients Say: Clients praise the thoroughness of the PitchBook database. Users are fans of the ability to search personal queries, investor links, and other transactional resources when doing due diligence.
Pricing: Pricing is available upon request, but the high-end version of the service has been reported to cost as much as $1,500/month.
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Cons
Crunchbase is a leading source of private, startup, and bootstrapped company information. The platform lets users find prospects, investments, and investors with their powerful database and toolset. The market research component also provides plenty of context for private equity professionals.
What Clients Say: Users are happy with Crunchbase for doing competitive research and analysis, though funding and investment data can be difficult to find in a consolidated way.
Pricing: Pro starts at $49/month. Enterprise plans are available on a quote basis.
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Cons
Public companies have more activity available to the public, making it easier to assess their risk, performance, and how likely they are to become a profitable investment. However, this means there is also more competition for the best transactions with the best prospects. When it comes to researching public companies, a tool that includes historical trends and market analysis is useful for finding and transacting M&A deals.
Public Comps is a tool for analyzing software companies that are traded publicly. The platform analyzes historical data, as well as common metrics like retention, customers, ACV, employee count, and more.
What Clients Say: Clients praise the ease of importing and exporting data, as well as the quality of metrics that are drawn from trusted sources.
Pricing: Free plan, with a Pro plan at $99/month.
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Cons
One of the most powerful investor screening tools on the market, the S&P Capital IQ platform offers a huge array of tools to find potential investors for fund managers. Offering a wide range of data points, the platform includes 5,000+ data items and sector-specific data for 17 industries.
What Clients Say: Many clients report locating investors for their funds using the platform, and given its pedigree, it's one of the most prestigious tools on the market.
Pricing: Available upon request.
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Cons
Designed with investment bankers, buy-side traders, and client services in mind, FactSet provides information and tracking for public companies, a robust client management portal, powerful export tools, and modeling and simulation tools.
What Clients Say: Many clients prefer FactSet to competitors like Bloomberg and Reuters. For an overview of a portfolio and examination and analysis of common market trends and news, FactSet is a powerful tool.
Pricing: Available upon request.
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Cons
Refinitiv leverages the power of the Reuters market news network to assist private equity and investment firms in generating better deal flows and analyses. They also have an API to help your team build complementary tools and get the most out of the platform - if you have the developers to utilize it.
What Clients Say: Because of its connection with Reuters, many users praise the accuracy and fidelity of much of the information gathered through Refinitiv. Additionally, many of the most important metrics on many companies are easy to monitor, from ratios to a swath of financial figures.
Pricing: Not publicly available, but there are reports that a basic version starts at $3,600/year and can go up beyond $22,000/year.
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Built by former hedge fund analysts, Sentieo is designed to reduce the overall deluge of public information that rushes in daily. Sentieo provides linguistic search algorithms to make parsing and searching through reams of data easier. In addition, the platform provides modeling tools, including table extraction features.
What Clients Say: Users praise Sentieo's cloud-based and mobile-friendly apps and interface, as well as the depth of research and the quality of synthesis provided by the Sentieo algorithm.
Pricing: Free trial. Pricing available after a quote.
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Research tools for private equity data that are intended to enable deep, detailed analysis of target and portfolio companies should make it easy for dealmakers to visualize and crunch through vast amounts of data from across different sources. Model valuation and financial reporting are particularly helpful to PE professionals looking to develop and apply proprietary models that make it possible to predict investment outcomes and pinpoint ideal targets.
Throughout its history, AlternativeSoft has simplified the fund selection and portfolio construction process for investors with its award-winning quantitative analytics platform. Alternative Soft specializes in asset selection, portfolio construction, and customizable reporting features.
What Clients Say: Many users praise AlternativeSoft for its intuitive design with powerful and comprehensive analytics functions.
Pricing: Estimates start at $8000/year.
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Carta is a global ownership management platform that maps the ownership network for over 8,000 companies. Designed to help private companies manage cap tables, the platform has since expanded to provide additional features.
What Clients Say: Clients report that Carta is a powerful platform that greatly simplifies and assists with cap table management.
Pricing: Available only after a demo.
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Looker is a data analytics platform that provides powerful data discovery tools from a web-based interface that is part of Google Cloud. The primary functionality and benefits of the platform come through its SQL flexibility and visualization features. If you're looking for a powerful and easy-to-use data tool that leverages some of the best analytics tools in the industry, look no further. While not specifically built for finance, it can be adapted to fit just about any need.
What Clients Say: Users rank Looker's accessibility much higher than comparable tools, and for the more technically minded, the SQL functionality is rated very highly.
Pricing: Free trial, followed by custom pricing.
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Both PE and VC should consider contact and prospect information tools to help them not only get in touch with the right stakeholders, but also discover mutual connections that improve their chances of connecting.
RelSci is a powerful data gathering tool. It aggregates information from over 10 million influential decision makers and over 1.8 million organizations, all in real time. The platform collects information across public, private, financial, and non-profit industries.
What Clients Say: Users praise the Path Finder tool, which allows users to trace paths between people, places, and other lists to determine connections. Users also like the ease of use and high-quality visual representation of useful relationship information, which often includes news articles and biographical information.
Pricing: Available upon request.
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Equilar's database of corporate relationships, compensation, governance/shareholder engagement, and executive and board recruiting can be a powerful research tool in your deal flow.
What Clients Say: Designed for boardroom-level decision makers, Equilar is often highly regarded in those circles and is one of the most trusted platforms for evaluating corporate relationships and governance.
Pricing: Free demo. Pricing available upon request.
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4Degrees is a powerful relationship intelligence platform with a built-in CRM that is designed specifically for venture capital, private equity, and other aspects of financial services. It allows for easy searching, browsing, reporting, and analytics to be performed on the team's network, providing valuable insight when relationship building.
What Clients Say: Most clients report that the platform enhances their sales pipelines and arms business development teams with plenty of valuable insights before contacting a potential prospect. Additionally, many users have praised the data exporting features.
Pricing: Available upon request.
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ZoomInfo's mission is to link a best-in-class database with technology that can provide a 360-degree view of customers and prospects. ZoomInfo includes functionality for territory planning, lead scoring, sales prospecting, conducting targeted outreach, and more.
What Clients Say: When paired with a CRM, many users report that ZoomInfo is an incredibly powerful tool. They praise its ability to climb into companies' hierarchies, gain insight into the platforms and products they use, and easily integrate contacts into other platforms.
Pricing: Free trial. Pricing is available on a quote basis.
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Clearbit software does many things, but one of the better applications within the suite is Clearbit Prospectors, which allows PE professionals to generate contact lists quickly and easily without having to purchase stale email lists from low-quality sources.
What Clients Say: Most users of Clearbit report that drawing in new lists is easy to do and that the lists integrate well into Salesforce, Marketo, and other platforms.
Pricing: Pricing is based on firm size and available upon request.
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Real estate can be a large area of investment, and there are many available research tools for VC firms that are dedicated to real estate investment management and research.
AppFolio Investment Manager is part of the AppFolio family and is considered one of the best all-in-one software solutions for managing real estate investments. Support for fund management and syndication makes this a great tool for better understanding and managing a real estate portfolio.
What Clients Say: Most users report it is incredibly useful for managing a real estate portfolio, though those who are looking for management of other investments ought to look elsewhere.
Pricing: Starts at $600/month
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Juniper Square is one of the premier tools for commercial real estate investment managers to raise capital and improve their operations. It's an all-in-one investment management software designed specifically for commercial real estate.
What Clients Say: Clients sing the praises of the data room feature as well as the investor reporting and CRM tools, which are all accessible from a single dashboard.
Price: Available upon request.
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With the right research tools for your private equity or VC firm, you can source more investment opportunities, get better information about prospects, and build a proprietary advantage over your competition.
But research tools comprise only one part of what you should have in your private equity tool belt. With the right technology, your firm can transact more often, return more on your investment, and concurrently become more efficient and collaborative.
Download our guide to the modern dealmaker's tech stack to learn what your firm needs to succeed.
