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Let’s take a look at how commercial due diligence is made easy through the use of expert networks, for PE firms
A PE firm, also known as a Private Equity firm, is an investment management company that invests capital into companies that are not publicly traded. The investment capital is sourced from institutional investors or high-net-worth individuals. Some examples of PE firms include KKR and Blackstone. For the year 2022, Bain’s mid-year outlook paints a gloomy picture characterised by inflationary pressures for PE firms.
For PE firms, expert networks play a vital role in commercial due diligence. Since these firms engage in high stake deals, it is crucial for them to know when to walk away from a deal. This is where the best expert networks help PE firms make this decision.
Expert networks are an imperative component of the process of commercial due diligence. PE firms require expert knowledge to reduce uncertainty and risks in their investment deals. A subject matter expert, sourced through the best expert network, can save a PE firm from losing money. Expert networks connect knowledgeable experts with these PE firms, to help them make a decision. Now, let’s look at how the best expert networks aid in this process.
In this section, we dive into three examples of how the best expert networks help PE firms in commercial due diligence.
Let’s take a look at an example where a PE firm is wanting to acquire a company that operates in multiple geographies. For this purpose, they need insights into the regulatory landscape, top players in the market, and other KPIs. Due to the niche nature of the business and multiple locations, the PE firm streamlines the process to get data through an expert network. So, the best expert network then gathers all the relevant information. They can do this easily because they already have a list of industry experts in different locations.
Therefore, the best expert network can help get all this knowledge from different parts of the world. Even if the company is expanding to different geographies, the pool of experts can be widened to those locations. Additionally, the PE firm can get experts from any industry to support its deals.
In this way, the expert network is arguably the quickest way to get actionable information. The best expert network helps connect the firm with experts in just a few days. Usually, this is done with the help of a phone call. Rates for the expert consultation can be quite high, but it can be worth it to get deep market insights. Experts have typically built market knowledge over years, and this can be instantly shared over a phone call. However, there are some cons to using the best expert network as well. Sometimes, irrelevant experts can be sourced or the fees charges can be very high. If you’d like to learn more about the pros and cons of expert calls for PE firms, you can read our blog.
The PE landscape has a lot of uncertainty and firms need to close deals quickly. Supply chain disruptions, inflation, and lower consumption have put pressure on PE firms. In this time of uncertainty, PE firms must reduce uncertainty and act quickly. By closing deals ahead of the competition, they will be able to get a first mover advantage.
Since expert networks can source market insights relatively quickly for PE firms, this can help them get ahead of the competition. In fact, commercial due diligence in any form can help PE firms navigate uncertainty. Geo-political risks, the verge of a downturn, and unstable interest rates also hinder PE firms. During a downturn, the best expert network can give an inside look into market predictions. The PE firm can gather information on upcoming trends, and potential issues and then decide how to tackle them.
The Covid-19 pandemic has added another layer to this uncertainty for PE firms. To sum up, the best expert network can help the PE firm get an edge over the competition. You can read our recent blog post on how commercial due diligence can help your business in a downturn.
Experts can be a valuable ally to PE firms. This is because the best expert network can connect the PE firm to knowledgeable experts who may have other clients. Hence, by connecting to the best expert network the PE firm can grow its client base. More clients will naturally mean more deals for the PE firm. Thus, in this manner, the PE firm can also see revenue gains. Not only can revenue increase, but the firm can have more contacts and connections in the industry. In addition to this, PE firms can get credible and accurate data from the best expert network. Therefore, the PE firm can solidify its investment deal with the right market insights.
Having looked at three cases where expert networks are indispensable to PE firms, let’s see the way to get the most out of them.
If you are a PE firm wanting to reach out to an expert, have certain goals in mind beforehand. Prepare a list of topics or questions that you want market experts to help with. Expert calls usually last an hour and come with a high price tag. Hence, you want to make sure you are getting the most out of the call. GrapeData can help facilitate this follow up call for you. We have over 300k contributors on our platform, including experts from many fields. We can match your business to the best knowledgeable expert. To see how we can do this, email us at sales@grape-data.com and we’d be happy to help.
We also recommend that you be as clear as possible to the knowledgeable expert. You must set clear expectations of which market insights you want. You should also set a deadline for when you want the expert to get back to you to organise the follow up call. To add to this, you can also consider taking notes over the consultation for your reference. At GrapeData, we make it a priority to share an understanding of the project with our client. You can have an initial call with us to discuss the scope and timeline of your project. From there on, we can help source the best expert for your project.
During the call, we recommend giving the expert as much context as you can. Doing this will help you get a better understanding of your investment deal. Additionally, since you have limited time, we would advise you to touch on all topics that you want. If your expert is going off the path you want, you can subtly redirect him to the subject. We have been conducting follow up expert calls for PE firms for a few years now. Through our core values of empathy and shared understanding, we make it a goal to get the best expert for you.
In conclusion, the best expert network can be a valuable tool in commercial due diligence. This is especially true for PE firms that have to deal with uncertainty. Commercial due diligence is used not only to reduce risks in deals but also to make an informed decision. This past year, PE firms have seen a little turbulence in the industry. A combination of supply chain issues, inflation, and interest rate risks has led to this turbulence. As a result, the role of expert networks in PE firms has gained even more importance. However, PE firms must utilise expert calls efficiently due to time and money constraints.
With extensive experience in the PE and management consulting industry, GrapeData can help get the most out of expert networks. Please use our contact form to get more details on how we can help.
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