PE Stack currently tracks over 40 vendors with a front office CRM offering, and you can see full profiles for these providers on our Vendor Profiles Platform (free to use, no registration required). Front Office CRM is an essential part of the technology stack for private equity and venture capital firms. Core use cases for CRM (customer relationship management) on the deals side of the firm include deal sourcing and deal pipeline management; while on the investor relations side CRM is often used to support LP investor fundraising and ongoing investor relations activity.

Key Functionality

Data Ingestion

One of the most important factors to consider when looking at front office CRM is the process for adding communication data to the platform. All platforms allow for the manual addition of data via the user interface. Most will also provide an Outlook-based plug-in to add and sync data directly the CRM from the email client. Mobile apps are increasingly common. Some platforms also allow for automatic ingestion of communication and calendar information by linking directly to the email server and automating the process of syncing data; in these cases it is important to setup a platform effectively to ensure precautions are being taken around privacy. One advantage of syncing directly with a server is that it is possible for platforms to provide relationship intelligence data, which can be helpful in establishing where strong relationships lie within a firm that can lead to warm introductions with prospects.

Tracking Targets

CRM platforms in private equity and venture capital should be able to support the activity of tracking potential targets for investment or acquisition, potentially from a list of companies exported or synced from a market data provider. The presence of a native integration with the leading data providers is therefore important. Similarly on the investor side, CRM front office should support the activity of targeting LPs for a fundraising effort, with native integration with leading LP investor databases seen as desirable.

Integrations – Data and Software

Many platforms will include integrations which come out of the box for all users to allow for news reporting, company information and contact enriching capabilities. Examples of commonly synced services include Crunchbase. Premium integrations which require an appropriate license to activate are expected by the industry; it is common to see one or more of Preqin, Pitchbook, S&P, Factset, SPS and Sourcescrub available to view via the CRM platform.

Integrations with other software providers are also an important consideration, and we see both industry-specific integrations with other private capital tools such as LP Portals and Portfolio Monitoring as desirable. It is also common to see integrations with more generic tools such as Microsoft Office, G-Suite, TypeForm, Hubspot and others. Many vendors will also facilitate custom API-driven integrations, but buyers should be aware that such development can result in considerable cost – both in terms of the development and also licensing the data.

Deal Pipeline Management

As targets move down the funnel, front office CRM platforms should also provide the user with functionality around managing active deals. This area is often called Deal Pipeline Management. This can be more of a task oriented area of the platform, with some providers automating and setting reminders for the various activities which must take place as part of the deal process. Document management is also commonly included to support this type of activity. This is a good example of where platforms built specifically for the industry, and already contain an understanding of the typical workflows seen at private equity and venture capital firms, can add value over a more generic solution.

Other Industry-Specific Workflows

Another example of such functionality would include specific workflows for managing relationships with intermediaries which incorporate intelligence from the market to prompt proactive communications to ensure the firm is seeing the right deals as they come to market. Reporting is another essential piece of functionality which CRM buyers should evaluate, with many platforms containing pre-built reports to satisfy requirements for Monday Morning Meetings and other key analytics.

Pricing

It is common for front office CRM to be priced according to the number of seats. In some cases vendors will provide modularity around accessing areas designed specifically for deal sourcing, deal pipeline and investor relations. Some vendors will incorporate a two-tier system for pricing, with support or admin staff provided with seats for a lower price – which is sometimes accompanied by lesser functionality such as read-only access. Buyers of CRM front office software should be aware of the potential for additional costs due to market data integrations and customization work.

Implementation

It is common for vendors to charge a one-off fee for platform implementation, which can vary from 25% - 75% of the ACV (annual contract value). Buyers should be aware of this and factor this into their budget. Implementation fees cover the cost of customizing the platform and importing existing data from a pre-existing solution which is being retired or Excel spreadsheets.

Point Solutions vs. Suite Solutions

So called point solutions, or best of breed solutions, compete in the space with vendors which provide front office as part of a wider suite of services. There are valid arguments as to why either approach could be beneficial for users, but we tend to see this argument as over-simplified in many cases. Certain vendors provide a full suite of services from front to back office where the front office CRM module is competitive as a point solution and is available as a standalone module - eliminating such vendors from a procurement process solely on the basis of being a ‘suite’ provider would therefore be foolish.

Similarly, many point solutions have invested in building APIs and native integrations with adjacent industry software providers for data consistency and ease of use - therefore buyers seeking multiple solutions within their wider stack do not need to limit their options to vendors providing all of the required modules. When working with clients for front office selection, we recommend assessing viable solutions on individual merit and alignment with set requirements.

Key Vendors

PE Stack maintains detailed profiles for all front office CRM software providers with products for private equity firms, venture capital firms and LP investors on our Vendor Profiles database. This resource is available to use for free and requires no registration. One interesting factor within front office is the presence of major software providers Salesforce and Microsoft Dynamics: We tend to see significant variation in satisfaction with these generalist solutions, often predicated on whether or not the solution was setup by a private equity specialist. There are also a number of platforms such as Altvia and Navatar which use Salesforce as the basis for their specialized private equity / venture capital platform. Allvue is an example of a Microsoft-based platform which leverages Dynamics as the source of its front office application.

Some of the major providers with tools built specifically for the asset class include DealCloud, Backstop, Dynamo, eFront and Atominvest. Affinity and 4Degrees are both growing in popularity and do well in the venture capital space and for firms which are seeking a more automated data ingestion and enrichment approach. In total, there are around 40 vendors which PE Stack tracks which offer either a standalone platform or include CRM front office as part of a wider suite of services, making this one of the more competitive areas of the private capital software industry.