Sometimes your dealmaking may get stuck in the doldrums. When the economy’s growing or shrinking, you’ll see plenty of M&A action – but when there’s uncertainty, the deals can tend to dry up. Even so, the opportunities are out there. You just need to work harder for them. Or rather, work smarter, using three simple rules – and the right tech tools.

Rule one: Build strong relationships

The chances are that more than half of all your deals – around 55% – come from direct channels. That is, they come via contacts that you already have, such as from previous deals. That stat alone shows the value of rigorous pipeline management.

Think of direct channels as your home-grown sustenance. Nurture them. Step one is to create a central repository of all your own contacts, where you can store all relevant information. You don’t want to waste precious hours and effort sifting multiple year-old emails for a name or key information.

Once you have your database, keep feeding it and growing it. Whenever you meet someone, whether for the first time or the tenth, make notes of personal details and conversation specifics. Then set calendar reminders to check in with your contacts, using your notes to create a strong pretext for reconnecting.

If you’ve ever envied charismatic types who have a gift for winning people over, remember – that’s all they are doing. By instinct, they gather data on their contacts, and they use it to make them feel valued. Create a system and a process, and you can do it too.

For example:

• Three months have passed. That’s a good time gap to justify a courtesy call.
• Maybe their child was about to graduate. Time to offer your congratulations?
• You learned that they are a big tennis fan. You could ask if they have plans to attend the Miami Open.

With luck, there will be something in your notes to provide good material for getting back in touch. As you build your network, share these contacts with colleagues. You never know how such relationships may link up behind the scenes, or offer leverage to develop even more. And, sometimes, you can put two together and the outcome is your next deal.

But doing all of this manually can squander more time than you have. Fortunately, tools now exist to let you organize and share all these contacts, CIMs, NDAs, meeting notes etc., from one base. And in the same base you can capture all relevant communications and documents from your targets.

A word of warning: make sure you lay down clear ground rules about how contacts can be used. For instance, should you be the only one who makes contact? Can others, but only after an introduction by you? As a safeguard, share names but not contact details, just in case red lines are crossed.

Rule two: Use better tools

By far the most popular way to manage a deal pipeline is with a combination of Excel spreadsheets and emails. Three in four dealmakers do it this way. Unfortunately, ‘popular’ doesn’t mean good.

Using these outdated tools means that huge amounts of energy are going to waste. Work gets duplicated. Version control runs out of control. Messages get lost. And opportunities get missed. It’s not merely a question of adding extra workload. It also invites much more risk into the process.

That’s why more corporate development teams – and PE firms – are ditching yesterday’s tools for new ones made for the task. These enable the airtight pipeline management needed to juggle multiple transactions.

Ask your deal team these questions:

• Do your tools work, or do the workarounds only make them seem to work?
• What pain points do you still have with your current solution, even with the workarounds?
• Is everything in one central, secure place?
• Have you ever thought, ‘Surely there’s a better way to do this?’

The latest pipeline tools let you seamlessly visualize, compare, and assess various inputs and data sets. This means you can compare potential targets, track touchpoints, store documents, visualize progress, and communicate effortlessly with colleagues.

The value of this is vast. Raw data becomes consumable information, which informs a decision, all in the space of a few clicks.

Rule three: serial acquirers need to take the long view

Bolt-on or tuck-in acquisitions are the strategy of choice for some 86% of Datasite users. They are, in essence, serial acquirers – which means that having a healthy pipeline is vital.

The odds are that this applies to you, too. That’s why you should never compromise the strength of your pipeline for the sake of low-hanging fruit. It may be tempting to make strategic sacrifices for the sake of closing a deal that looks imminent – but always think about how it could hinder your long game. Make sure you understand the investment thesis for every acquisition. Then prioritize the ones that look strongest in that context. Will this build your market share, or help you enter an adjacent vertical? Are there strong synergies? It can be like collecting sets in Monopoly – you want deals that fit well with what you already have.

That’s why you should always be looking ahead to the next deal. But how? Firstly, you need to create repeatable playbooks for your deal teams, especially when voluntary turnover is high. If a key player in your team leaves, could it jeopardize your strategy? How are your pipeline meetings run, and can they be more efficient? If you can create time savings for the juniors gathering the materials, that’s extra time for due diligence – and, ultimately, more deals.

By working smarter with purpose-built pipeline tools, you can amplify your team’s abilities to manage deals at scale. Your whole deal team can see your deal pipeline’s health. With data silos eliminated, everyone can access the same views of the data. Run all analytics from your dashboard, with no more flipping between software. Track metrics such as targets’ EBITDA, revenue, and opportunity stage, and generate custom graphs to compare targets.

By working seamlessly together, you can create a smoother journey from sourcing deals to securing them. In a time of uncertainty, you can bring more certainty than you’ve ever had before.

Source: Datasite survey of 400+ M&A professionals, February 2022