Deal sourcing is the backbone of every private capital firm. Dealmakers need a steady stream of opportunities that both align with their fund’s thesis and show the most growth potential. By combining data, research, marketing, and relationships, dealmakers can find new founders and companies as well as stay alert to opportunities developing in their existing network.
But as the number of opportunities grows, the process of finding, tracking, and evaluating them grows increasingly complex. Affinity simplifies the deal sourcing process. With automated data capture and AI-driven relationship intelligence, dealmakers can make confident decisions faster using data-driven insight. And they can access this data wherever deal sourcing takes them—from email to LinkedIn and company websites—with extensions that maintain a live connection back to the CRM.
This guide will help maximize the value Affinity can bring to your deal sourcing workflow by examining:
- The challenges (and how to overcome them) of deal sourcing
- Best practices that have the highest impact on sustained success
- Exactly how Affinity can help you implement these best practices
Deal sourcing best practices
1. Use network and data to discover timely opportunities that match your investment thesis
Get full visibility into your entire firm’s network of relationships and see up-to-date sourcing opportunities that are best suited for you to win.
“Our entire global team can log into Affinity to see what’s coming through the pipeline, even if they haven’t been involved in the deal directly. So if they have specific expertise relevant to the deal, they can chime in. It lets us overcome geography to give us a global perspective on our decision-making.”
Sam Campbell
Global Venture Operations Manager & Investor at Samsung NEXT
Challenges
- Effectively managing your network: Keeping track of personal networks is a manual and time-consuming process that requires regular upkeep and check-ins with others in your industry.
- Analyzing large volumes of data: There are countless sources of data that firms can include in their sourcing strategy, but it can be a challenge to pick up signals in the noise created by all this information.
{{bp-checkbox-6="/rt-components"}}
2. Find out-of-network companies that match your investment thesis
Get consistently fresh data on startup growth, progress, funding, performance, and employees in order to track companies of interest.
“We love Affinity’s ability to gather insights automatically about companies. It's a huge time saver and a benefit for us to have the information at our fingertips.”
Lauren Gomez
Principal at SOZO Ventures
Challenges
- Data quality: Many investors don’t have the right data, or don’t trust their data enough, to rely on it consistently for identifying interesting companies.
- Data accountability: Investors sometimes have the right data points to make decisions around sourcing, but they don’t have a way for that data to proactively tell them when something has entered their criteria, or when a key data point changes.
- Fragmented data: Investors may use multiple sources to gather key insights about a company. It then takes time to aggregate this information into a format that is shareable and presentable to the team.
- Getting warm introductions: It is often difficult and complicated to find who can effectively give a warm introduction to a founder.
- Finding founder contact information: Without warm introductions, investors default to sending cold outreach. Not all founders readily respond to Linkedin and, as with any outbound process, it can be hard to find the right email to connect with a founder.
- Brand awareness and trust: Without the prestige of being a top-tier firm, it takes time and energy to build trust and rapport with founders. This means that when it comes time to make decisions about who they will partner with, less known investors can be deprioritized.
{{bp-checkbox-7="/rt-components"}}
3. Use relationship intelligence to evaluate more effectively and move forward the best matches faster
Confidently and efficiently evaluate every deal opportunity to ensure you are focused on the right fits for your specific investment thesis.
“Affinity allows us to create fields and stages for prospective companies. This is very helpful as we integrate Affinity with RISTA, our proprietary data analysis tool, which helps us identify potential investments in the market.”
Itxaso del Palacio
Partner, Notion
Challenges
- Accessing warm introductions: Warm introductions can close deals 25% faster but it is often difficult and tedious to find out who has the strongest relationship with a founder.
- Deal prioritization: Time is finite and firms need the right data points and relationship insights to strategically prioritize which deals they dedicate the most resources to.
- Crossed wires: In the middle of researching a deal, duplicating work due to lack of visibility can slow down a deal’s velocity—and risk damaging a founder relationship if multiple team members reach out.
- Depth of research: Diverse perspectives and reference checks can help investors to evaluate whether a deal is worth pursuing, but it can be hard to identify the right people to reach out to if the firm’s collective network isn’t properly cataloged.
{{bp-checkbox-8="/rt-components"}}
Deal sourcing: Affinity tips & tricks
Top firms source more efficiently by being able to answer questions like:
- Does this prospect meet our investment criteria?
- Have we interacted with this founder before and what was the outcome?
- Which of my colleagues has the best relationship to provide a warm introduction?
Here are four ways to make your deal sourcing process more efficient in Affinity.
1. Clearly access and analyze your entire firm’s network of relationships to provide up-to-date sourcing opportunities
Use relationship intelligence to gain a full view of your firm’s collective network—with embedded real-time relationship scoring to quickly identify the warmest source of introduction based on relationship characteristics like frequency and recency of communications. This can also help you collaborate more effectively with your team and avoid crossed wires by quickly identifying ongoing deals across your firm.
Want to extend your network further?
Affinity Alliances allows you to share networks with trusted external partners, mentors, and other allies that work outside your firm. Each Alliance provides insight on new introduction paths for an average of 4,000 people and 800 companies.
Or for sourcing deals from the networks of co-investors and LPs, Collaborator Seats can help. Use Collaborator Seats to provide access to curated opportunity lists that allow your dealmaking partners to highlight where they may have a valuable connection for a warm introduction.
Find new value in the historic relationships you've lost touch with or that you’re currently tracking. Inferred Connections lifts the lid on the people that you and your team can potentially get introduced to based on previous shared work experience.
Instantly access these insights, take action on existing opportunities, and capture data on potential new deals directly from your browser when you use Affinity Pathfinder. With a live connection to your CRM, this Chrome extension dramatically reduces time spent on sourcing and screening opportunities with relationship intelligence, business insights, and pipeline data available across websites, LinkedIn, and Gmail.
Make changes in Affinity Pathfinder safe in the knowledge that updates are instantly viewable across the team. This allows you to quickly find and qualify opportunities while ensuring wires aren’t crossed—and helps more senior team members (who are often lower-touch CRM users) maintain oversight during the sourcing process.
2. Use past interaction history with startups and data enrichment on founders/potential founders to drive better outreach
Affinity automatically captures all interactions your firm has with those in its network. This historical context, combined with enriched data from sources like Pitchbook and Crunchbase, makes it simpler to vet and prioritize opportunities—and to do so without breaking the flow of work when using Affinity Pathfinder.
People data includes information on education, current job title, current job functions, and current organization, which can help you target founders who have profiles that align with characteristics where you've seen previous success and/or align with your fund’s thesis.
Using current job start date data helps to highlight where changes in employment have occurred across your network, and where someone may have landed at a company that you’d like a warm introduction to. For founders who may have transitioned from a corporate role to focus on their own project, LinkedIn profile headline data puts the spotlight on new opportunities that could be of interest.
Finally, use Affinity’s Eventbrite and Mailchimp integrations to view event RSVPs, event attendees, and email open and click-through data. This can help you prioritize engaged prospects and create more personalized, contextual outreach.
Affinity brings all this data together into a centralized hub of critical deal information.
3. Include work history and company data as additional targeting criteria to find more quality opportunities
Refine your sourcing strategy and execution with enrichment of data related to founder work histories. These insights help make your deal sourcing more efficient, without sacrificing quality.
With Affinity Data people insights, your CRM records are enriched with more accurate, complete, and up-to-date data insights. Explore biographic and experience data on founders and executive teams to better evaluate the deal’s key stakeholders.
Dig even deeper into your network with Inferred Connections, which puts a career’s worth of relationships at your fingertips. Inferred Connections uses employment data from employment data from 3rd party and public data sources to surface people that you and your team could potentially be introduced to based on previous shared work experience—helping you to vet and then connect with high quality opportunities.
4. Efficiently surface and track companies that match your investment thesis with consistently fresh data on company growth, funding, performance, and employees
Minimize wasted effort by ensuring the companies you track are well matched with your firm’s investment thesis. Affinity provides a wide variety of organization data points at your fingertips, along with the ability to customize, filter, and analyze and format to see data as it best suits your needs.
Affinity provides fresh data on company growth, funding, performance, and employees to help make a decision on adding it to your deal pipeline. Access company profiles to see current employee counts at a glance, assess employee distribution by function, or filter based on seniority level to gauge the maturity of the company. All of these attributes are available as graphs showing how trends have evolved over time, and their percentage changes.
With Affinity, you can also drill down on opportunities based on the company’s current investors. For example, if you’re looking for Series B companies that have previously received funding from a specific firm, you can easily surface this information within Affinity.
Accelerate sourcing further with AI-driven industry insights. Identify high growth potential investments with a look at market saturation, view the headcount growth of other companies in the industry, and determine investor sentiment by viewing funding history of relevant related companies.
The beauty of a centralized source of truth is that all the data you need to qualify an opportunity is in one place. And with Affinity Pathfinder, this data is available on websites, LinkedIn, and Gmail.
Pull all of that data together using Affinity Analytics. Using Affinity’s enriched company firmographic, funding, and growth data alongside your proprietary data and deal activities, you can more dynamically visualize opportunities, refine outreach efforts, and glean insight from the performance of deals that were passed on.
Use Affinity to reduce the risk and uncertainty when choosing the right opportunities to go after.
Conclusion
Private capital success hinges on effective deal sourcing and relationship nurturing. Yet, surfacing the best opportunities and reducing the risk of missing the right deals is no easy feat.
Affinity makes deal sourcing easier by helping teams identify high-potential opportunities aligned to their thesis through unique deal signals powered by a centralized data source and AI-driven insights. Relationship intelligence then helps to identify the best way to source an introduction to an opportunity, a strategy that can ensure you’re beating the competition to the biggest opportunities, and closing deals 25% faster.
{{cta-block="/rt-components"}}