Is there a purpose-built CRM for Search Funds?
New searchers often ask which CRM and/or email outreach software they should be using and so we thought it would be helpful to share the results of a survey we did that included 100 Search Funds.
The short answer to the question of whether or not there is a purpose-built CRM for search funds is ‘no’.
However, some searchers have found success by customizing CRM systems designed primarily for sales and marketing teams.
Table of Contents
1. Interesting Findings
2. Does a Search Fund Need a CRM?
3. Common Search Fund CRM Requirements
4. CRM Capabilities NOT Required by Most Search Funds
5. The Email Inbox as a CRM
6. Survey Results – Which CRM Do Searchers Use?
7. Key Factors in a Search Fund’s Choice of CRM
8. Were the Searchers Happy (with their CRM)?
9. Final Thoughts
One of the interesting findings from this survey is that there were few emphatic endorsements of any particular CRM system and we learned that searchers were using over 30 different CRM systems.
Not only did we find out which CRM systems are the most popular among searchers, we also learned which CRM features are the most valuable in a search as well as potential pitfalls to look out for when choosing a CRM system for a Search Fund.
The searchers we surveyed were at various stages of their search – from fundraising to having completed the search (some with a closed deal and others without a closed deal).
More than 90% of the searchers we surveyed were located in North America and more than 75% of them had previously used a CRM system of some sort (i.e. in a previous job).
Does a Search Fund need a CRM?
Before we get into the survey results, let’s discuss whether or not a Search Fund even requires a CRM system.
There is less utility in a CRM system in the early stages of a search because you have fewer relationships to manage. However, over time the value of a CRM system grows considerably as the fund adds leads, builds relationships, executes outreach plans, etc.
Excel and Google Sheets as a CRM
Many searchers start by using Excel or Google Sheets to track both investor relationships and their lead funnel. This is a perfectly valid approach and is usually workable in the early stages of a search, particularly if there are just one or two searchers. There are some good CRM templates for Excel and Google that can be easily modified to suit the basic needs of an early stage search.
For the searchers we spoke with, the rationale for using Excel or Google Sheets was simple: they already knew how to use these tools (zero learning curve), they felt it was unlikely that they’d use the ‘search CRM’ again once they found a deal, and Excel and Google Sheets are inexpensive.
Challenges with Excel and Google Sheets as a CRM
The challenges with Excel and Google Sheets generally come as the search scales beyond simply managing a list of potential investors, to full-blow deal sourcing campaigns and working with interns.
Many searchers adopt a real CRM application within the first few months of their search. A few of the challenges with Excel and/or Google Sheets reported by searchers included:
Limited ability to see aggregate views of the overall search status (no summary view to share with investors, no funnel status views, etc.)
Difficulty tracking all sourcing activities in a central location for each lead (i.e. email threads and notes); funds often ended up with multiple workbooks or sheets.
Poor outbound activity automation (emails, response tracking, follow-up alerts, etc.)
Inability to centrally store documents at the lead level (NDA’s, financials, etc.)
We believe that most Search Funds would benefit from a simple, low cost, purpose-built relationship management system (that is beyond what is available in Excel or Google Sheets).
Such a system will be particularly helpful to a searcher 4-6 months into the search (earlier if there is more than one person sourcing deals).
Common Search Fund CRM Requirements
Our research and experience suggests that there is a fairly common set of core CRM requirements needed by most Search Funds, as follows:
Simple – easy to learn and use
A database with customizable fields (and/or out-of-the-box fields that work for searchers)
The ability to classify contacts (i.e. brokers, prospects, company owners)
The ability to attach documents to leads (PDFs, Word, Excel, etc.)
A view that integrates outbound activities (by lead and for all leads)
Easy to import and export CSV and/or Excel data