One of the biggest challenges private equity faces today is competition among one another. There are thousands of private equity firms with billions of dollars to spend and it’s not always the highest price that wins. In today’s competitive market, differentiating your bid can make the difference between winning or losing a deal.
According to a 2017 Deloitte survey, sellers consider speed and conviction of closing a transaction, alongside price, to be key factors when choosing a successful offer.
To improve both, savvy firms put a premium on diligence or pre-diligence to form a strong, initial opinion of the target company, which can ultimately help them win the deal.
These firms know it takes more than the highest bid to win. It also requires a fast pace to edge out competition. That said, moving too quickly comes with risks; specifically, it means less information to examine and less time to review it.
So, how can you move fast to capitalize on an investment opportunity while hedging against risks of the unknown?
By speaking with expert advisors.
There are many benefits to working with an expert advisor. Advisors can give invaluable insight into the industry, market, and specific opportunities and risks associated with a potential deal.
Engaging with advisors as early as possible grants a considerable edge to any investor. The right advisor can make it obvious early on if a deal isn’t worth pursuing, freeing you to start looking at more promising opportunities. Or an advisor can highlight encouraging facts about a deal, of which other potential investors might be unaware.
Quick turn around during deal consideration is vital for a firm’s overall success. With so many opportunities, being quick enough to determine a deal’s potential before investing too much time and money can make all the difference.
The use of expert advisors can greatly increase the speed of the due diligence and pre-diligence processes. Their industry expertise and competitive knowledge can help a fund avoid costly, expensive mistakes up front.
If your fund could benefit from an advisor, try out a risk-free 30 day trial with InquireOf. With a low monthly subscription fee for the whole firm, search for and connect with as many advisors as you would like and build your go-to advisor bench. Make sure that lack of industry insight doesn’t hold your fund back from the next great deal.
