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Deal Flow Software: The PBJ of Successful Deals

Deal flow software is integral to successful deal flow management.  The software can serve both sides of the investment coin:  investors as well as those seeking capital.

Deal flow software is to the private equity market what peanut butter is to jelly.  You can’t put a PBJ together without both, and deal flow software is a major ingredient when putting deals together in the private equity market.  If the PBJ analogy doesn’t work for you, you might try thinking of deal flow software as the “yin” to the deal’s “yang.”

Successful Deal Flow Management

No matter what crazy analogy you come up with, the fact remains that deal flow software is an integral factor in successful deal flow management processes.  The main function the software serves is to monitor deal flow for a variety of investors:  private equity individuals and firms, as well as other investment groups.  Deal flow is a complex process with many individual pieces of data necessary to analyze viability as well as performance and deal flow software has the capability to integrate this data effectively.  For example, deal flow software provides the ability to quickly analyze the amount of capital released per individual investments and predict the likely return on those investments.

However, deal flow software serves a wide variety of individual functions which can then be translated in a clear picture of the status of a private investor’s or group’s investments as a whole quickly and accurately.  Another important benefit of deal flow software is error reduction.  Human error is vastly reduced as the software performs all calculations.  Additionally, we all know potential deals have a life of their own and often require quick action.  Deal flow software facilitates the ability to generate just-in-time reports and analysis needed to make fast, but sensible, decisions.

Deal Flow Software for Entrepreneurs

On the other side of the coin, deal flow software can also be utilized by entrepreneurs presenting investment opportunities to investors.  Especially for novice entrepreneurs, deal flow software can help ensure that presentations include not only the precise information investors want to see, but in the format they want to see it in.

Deal flow software can also include extremely powerful operational functions designed to run scenarios that can produce detailed predictions as to whether or not the business or product is worth the risk of investing in.  While it would be foolish to rest every investment decision on the software analyses alone, the software does provide a spectrum of best as well as worst case scenarios allowing a deeper examination to determine if a venture represents viable risk.

Not all deal flow software programs are created the same.  The onus is on the investor to ascertain their specific needs and match these specifications to available software.

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March 9, 2012 um 12:00 am
Miscellaneous Finance
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