Investors in the industry rely heavily on their network of investment bankers, business brokers, and service providers to identify potential investment opportunities, access financing, and add value to portfolio companies.
Having a strong network can provide a number of benefits. For example, it can help them to source deals that might not be available to other investors, gain access to unique financing options, and find the right management teams to run portfolio companies. Additionally, a strong network can provide firms with valuable industry insights and connections to other key players in the market.
Overall, network advantage is a critical factor in the M&A/private equity world as a differentiating factor, competitive advantage, and creates value for their partners both internally and externally.
The Network Advantage Conundrum: If Everyone Claims to Have a Great Network, How Do You Know Who Actually Does?
Naturally, with Network Advantage as a core component of any buy-side deal sourcing firm’s service offering, touting the strength of one’s individual networks is widely encompassed as a competitive differentiator for their clients.
But if the broader deal sourcing work claims a sublime network, it begs the question: What actually constitutes a truly advantageous network?
There is no prevention of encroachment around this question, so it can be difficult for investors who are evaluating various deal-sourcing providers to tell how distinguished and esteemed a particular network may be.
Because of this, we encourage folks, including those considering TruSight, LLC , to challenge potential partners to explore the key questions that distill the true value of a network, such as:
- Where did the network sources originate from?
- Are they highly concentrated in a particular area or spread out across a broad spectrum?
- How often does the company interface with the contacts in its network?
- Knowing that there is naturally a “half life” of sorts for networks, what tactics are the company taking to refresh and replenish its network pipeline?
- What unique strategies are they employing to differentiate from others?
TruSight, LLC - Our Network Advantage
Given the nature of the subject matter, we would be remiss to disclude TruSight, LLC network from the conversation.
How Many Contacts Are in TruSight, LLC's Network?
Currently, our network of relationship-driven contacts consists of over 12,000 investment banks and intermediaries.
In general, these professionals are lower middle market sell-side intermediaries and M&A advisors seeking the right partner for a buyout, majority recapitalization, and growth investments.
What Tactics Does TruSight Leverage to Refresh and Refill its Network?
In addition to the traditional industry events, research, conferences, and other relationship-building tools, TruSight has adapted to leverage modern data and marketing automation tactics.
We can efficiently scale outreach to our target segments and grow our network by automating various marketing and sales activities. These modern systems also help us test, track, and measure our efforts, making refining our strategies and systematically achieving better results easier.
It’s true that good old-fashioned relationship building will always be a cornerstone of network development, but supplementing this with “always-on”, contemporary tools increases market visibility and transforms deal-flow parity into advantage.
How Does TruSight Extend Beyond the Core PE/M&A Audience?
While extremely valuable for uncovering hidden gems, boutique investment banking firms and business brokers are geographically dispersed, some only bringing about 2-3 deals per year to market.
Because BD efforts are broad and varying amongst firms, TruSight. LLC has reinvented the way you target this important, but largely consuming segment of the market. In a future post, we will dive deeper into how TruSight has become a specialist in this hard-to-reach, long-tail sector.
What Other Differentiator Does TruSight Offer to Clients Outside of the Points Above?
In 2022, TruSight acquired Private Equity Info, which has been a trusted source for M&A database research for almost 20 years.
PEI is an invaluable resource for M&A research that offers detailed information on PE firms including their investment strategies, portfolio companies, and key executives as well as a vast arena of Investment banking professionals.
Additionally, it provides information on M&A transactions as well as industry trends and analysis.
This strategic acquisition has enhanced Trusight's resources and network advantage for our partners and enables us to compete in a cost-effective manner with even the largest organizations in the industry.
Network Advantage in Summary
Network Advantage is an incredibly important, highly touted, and often ambiguous factor in the M&A/private equity arenas. Understanding who “walks the walk” when it comes to network advantage can mean the difference between a successful and unsuccessful deal flow partnership.
When evaluating potential partners, be sure to ask the right questions to illuminate their network's true value.