Plenty has been written on venture capital (VC), private equity (PE) and mergers & acquisitions (M&A) as subsets of the financial industry. Despite the extensive coverage the concept of deal flow (sometimes written as dealflow or even deal-flow) remains vaguely formalized - partly due to lack of coverage, and partly due to the fluidity of the concept itself. Then, what exactly is a “deal flow”? Why is it important to investors; GPs, family offices and business angels alike?
We all know data entry sucks even when there’s so much to gain by meticulous data collection from multiple sources followed by thoughtful analysis. But let’s face it – it’s boring as hell and usually gets done only for those cases that you want to take a deeper look into.
Let’s face it: You want to see many cases to gain insight and to not miss any opportunities. You also want to zap (/zap/, informal, to destroy or to obliterate) almost all of them instantly since
As a finance pro, you are used to working with numbers and always tell the CEOs to have their numbers right. You understand that what can be quantified and measured can also be managed and improved. When did you last take a 360-view on your own numbers? You certainly know the latest IRR and deal multiples but how about metrics on your lifeblood – deal flow and its metrics?
If the worldwide business ecosystem was an ocean, then startups could be oysters. Oysters, that are trying to attract with their shell, while protecting the soft and vulnerable inside. If that was the case, then investors - venture capitalists, private equity companies, angels and such - would be pearl divers. Searching for the treasures of the ocean, natural pearls. Or perhaps some of them would be hunting for oysters with just a little grain of sand inside, to be farmed and grown to pearl oysters.
When was the last time you met a sales man who liked to spend his time by archiving information or a professional investor who enjoyed to manually manage his deal flow files? It has been a while, right?
How did the story of Zapflow begin? It all started when I ran the M&A and equity investments of a firm with 80+ transactions under its belt and so many evaluated investment opportunities. I felt all the pains personally and wanted to, not only solve my own problems, but also other professional investors working with their deal flow: insane amount of data, too much things to do and, to put it nicely, less than perfect tools to manage your deal flow.