Three different approaches for Deal Management

Doing BPM Projects for PE firms I found that each Private Equity has a unique way of managing his Deal flow that is different from other PE firms, but I would divide these "styles" in three macro-areas:


The focus on Cost Monitoring

In this case the PE firm uses a Deal Management System to:

• Maintain the Pipeline with a few synthetic data for each deal, including the current status, the main documents and the decisions of the Investment Team ;
• Monitor the Costs of each deal and to verify if each deal is "on Budget"
• Build reports about the Costs, with the focus on broken deals and on how much they charged the fund

The focus on the Target Selection

This is a common approach of Venture Capitals, who has to maintain a huge list of potential targets and does a lot of work for selecting and filtering the most interesting ones.

Here the Deal Management System must have many long text fields for inputing qualitative information about the potential target, evaluations about the management, the market, summaries, and more.

Full text search and a custom reporting (better if integrated with excel) are the most important features.


The focus on the Process Workflow

If you want to manage both the data and the workflow for each deal, you should request much more features from the deal management system, seeking something more similar to a "workflow and document management" system.

This system should have a tool for editing the process (path, steps, action buttons...) and it should assign tasks to each user depending on the workflow rules. For example a deal could stay at the step "Pending Approval from the Board of Directors" until the assignee of the step completes a check list of required actions like: adding a Bid Budget to the project, adding a set of mandatory documents, and so on.

Other workflows should be implemented for managing the approval of the Agreements and the relative payments, too.


Do you work for a PE or a VC and you want to share your experience about the problems and the solutions adopted for managing your business processes? Please Contact me.