Since founding ListAlpha, our team has migrated private equity customers from almost every CRM platform out there and as a result we have had first person access to the inner workings and limitations of these systems.
Based on this experience, we have created the below CRM buying guide for PE funds that are looking to choose the right system.
In true commercial due diligence style, we have tried to include as many consistent data points as possible across the competitive set. Where possible, we have also added estimates of pricing and migration timelines as well.
If you are a large, multi-asset private equity fund with complex workflows: go for DealCloud. They have the largest market share in this industry, the widest functionality suite and have experience in dealing with a variety of niche workflows and custom API integrations. The product requires a lot of manual data entry and has an aging user interface, however the breadth of features and their strong partner ecosystem makes up for it.
For a mid-market or large-cap PE fund looking to a modern and easy to use solution, ListAlpha is the best platform out there. We have signed over 20 customers in less than a year since starting the business (several of them from DealCloud) and almost all of them have cited how much easier, faster and more intuitive our platform is. We focus primarily on equity investors in the mid-market, growth and large-cap asset sizes, and rely on heavy AI and 3rd party data sources to enrich company and profile records.
If you are a venture capital fund or a smaller growth funds - Affinity is the best platform out there. It is custom made for the VC workflow focusing on founder outreach and relationship insights and finding potential sources of introduction within your network.
We would strongly advise private equity clients against going with Salesforce or Salesforce-based platforms (Altvia, Navatar).
We would similarly advise against generic industry ERP or CRM platforms such as MS Dynamics or Hubspot - you should definitely not be getting into these platforms in 2024. There are better (and cheaper) industry-specific alternatives out there.
Typically license fees for PE CRM platforms are quoted in $ per user per month (p.m.) or in $ per user per year (p.a.). This is multiplied by the user count (typically all users in the fund, including assistants, finance and other functions) to arrive at the total license fees for the year.
Contract can be annual or multi-year (e.g., 3 or 5). Sales teams of larger players (DealCloud or Salesforce) will typically push for multi-year deals as a way to lock customers into their ecosystem.
Vendors will also change data migration fees and onboarding fees (that are non-recurring and professional service in nature). This will range anywhere between 10% to 70/80% of the first years cost, depending on the complexity of the work (and the account exec that you are dealing with).
The better understand the competitive landscape in this industry, it is helpful to look at the founding dates of the respective businesses. Broadly speaking the market can be broken down into three groups:
We’ll begin with the most competitive modern systems, and take you through the wide range of platforms that are available today.
The latest generation of tech-forward platforms with full-spectrum, user-focussed relationship intelligence capabilities and API integrations.
Founded in London in 2021, ListAlpha is one of the few CRM platforms that benefits from a modern tech stack based on OpenAI GPT, semantic search and robust API-integrations. The platform is focused on deal team workflows (i.e., deal origination, research, screening) and differentiates through a modern and light-weight user interface, minimal data entry requirements and powerful search capabilities.
ListAlpha also has native company research engine that allows to perform due diligence and deal screening directly in the platform without relying on 3rd party API integrations with Pitchbook or Crunchbase. This allows for a seamless workflow without the need to data warehouses or cumbersome integrations between different software vendors.
Founded in San Francisco in 2014, Affinity has been one of the most successful VC deal flow players of the recent generation. The platform was built around native integration with email providers (Gmail or Outlook) and differentiates through strong Relationship Intelligence functionality. Affinity has strong traction among Venture Capital funds, however has had a more limited relevance in the Private Equity market due to the specifics of that customer segment.
Attio is another London-based platform that had its roots in the private markets. The company has developed a very modern and flexible platform for managing contacts, sales pipeline and various fund related administrative tasks. At first Attio targeted VC funds as its core market, however has since pivoted to the broader generic CRM market offering industry workflows for start-ups and scale-ups as well. We would not actively recommend it for new VC customers as they are clearly prioritising non-finance customers for their product roadmap / features.
An earlier generation of CRM platforms, these can be expensive and difficult to use - but can also be a good choice if you’re looking for an established all-rounder.
These players came as a second wave of industry-specific software providers that customized their workflows to the Private Equity market, thus avoiding the pitfalls of the generalists. The most established of this cohort are Dynamo, eFront and Backstop which were all founded in 1998-2003 and have since reached significant scale. The newer entrants include DealCloud (which is arguable the best of this group) and Altvia (which is based on the SalesForce platform, hence suffers from the earlier mentioned issues).
One of the best known names in the industry and a slightly more front office-focus than the rest of the group. DealCloud was started in 2010 in North Carolina by two founders with previous private equity experience. The company has 300+ employees globally and was acquired (2018) by Intapp, a legal software business.
Founded in Colorado in 2006 by Kevin Kelly, who previously was a CTO at another private equity fund. Over 15 years, the company has scaled to over 40k users and completed a sale to Bow River Capital in 2019 and subsequently Marlin Equity in 2022. Altvia offers a full-suite CRM however differentiates through a focus on Investor Relations functionality (e.g., LP communications, fundraising, virtual data room, etc.). Their platform is built on Salesforce, which gives rise to a number of disadvantages when it comes to the user interface and flexibility of the software.
If you have any choice in the matter these are generally a bad idea, given all the better options now available.
Despite their respectable age, the likes of Salesforce and MS Dynamics continue to feature on various software vendor lists for private equity, slightly to our bemusement. These are very large and generic sales platforms designed for industry customers (think manufacturing or life insurance companies), which have been "shoehorned" into serving PE clients by various industry integrators.
The problem with generic CRM platforms is that they are fundamentally designed for supporting the sales and customer service functions of medium to large corporates (think thousands of employees). On the size front, this stands at odds with the fact that even the largest mega funds have at most hundreds of employers (if not less than a 100). These platforms also don't deal very well with the fact that PE funds do not have customers, or sales people. Shoehorning these CRM platforms inevitably involves introducing slightly alien concepts like M&A advisers and deal pipelines, and turning off the multitude of "Work In Progress" and "Quarterly Sales Quota" reports, which as the bread and butter of the Saleforce customer base.
These platforms are generally cheap (HubSpot is free, Dynamics is c.$10-20k depending on team size), however installing them in 2023 is akin to sending your organisation back into technological dark ages.
https://dynamics.microsoft.com/
A long-standing CRM solution from the tech giant Microsoft, has been serving various industries since the early 2000s. While it offers a broad range of features and benefits from its tight integration with other Microsoft products, the platform struggles to cater to the specific needs of private equity firms.
About the author:
Prior to starting ListAlpha, Ihar worked as an investor at Mayfair Equity Partners, BC Partners and as a strategy consultant at Bain & Co. He has software engineering background and developed ListAlpha with the vision of creating a modern and AI-enabled platform that made private equity investors better at their jobs.
To learn more about ListAlpha CRM offering for private equity funds, see our CRM functionality page.
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