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What is Impact Investing?

Investors seeking to align their financial goals with their social and environmental values have turned to impact investing. Impact investing goes beyond traditional financial considerations and seeks to create positive change in the world while also generating returns. Impact investing is an investment approach that aims to generate both financial returns and positive societal or environmental impact. Unlike traditional investing, where the primary goal is maximizing financial gains, impact inv...
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Effective Strategies for Communicating with Limited Partners (LPs)

In today's competitive investment landscape, effective communication with institutional investors can help your debut fund stand out from the crowd.The right strategies that can help you establish and maintain productive relationships with limited partners (LPs). It’s easy to agree that effective communication is the cornerstone of successful relationships with institutional investors. But fund managers–particularly emerging fund managers– are juggling a lot of relationships. Relationships with...
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The Complete Guide to Getting into Private Equity

Private equity (PE) is a dynamic and lucrative field that offers unique opportunities for professionals looking to work with investments in privately held companies. Whether you're a seasoned finance professional or a recent graduate, understanding the work hours, culture, and skills needed to succeed can help you decide if this field aligns with your career goals.Private equity is a highly competitive industry. Before you land your first job in PE, you often need to get into the right undergrad...
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5 Questions LPs Expect Emerging PE Fund Managers to Ask in Their First Meeting

It’s no secret. Raising capital for a private equity fund as an emerging fund manager can be a challenging endeavor. From organizing your team, determining fund size, and sourcing deals throughout, general partners (GPs) are juggling a lot.But amongst all of their responsibilities one thing GPs need to keep top of mind: nailing the pitch with limited partners (LPs).In your first meeting with potential Limited Partners (LPs), it's crucial to ask the right questions to establish a strong foundatio...
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What is the Denominator Effect?

The denominator effect is a phenomenon in investment portfolios where the allocation of assets to specific asset classes or investments appears to decrease as a percentage of the total portfolio due to changes in the overall market value of the portfolio. When the market values of certain asset classes rise significantly, such as publicly traded stocks, the proportion of the portfolio allocated to other asset classes, like private equity or real estate, may appear to diminish, even if the actual...
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How to Value a Private Company

Private companies, particularly private middle market companies, are prime targets for M&A dealmakers, but it’s often unclear the best way to access their value. Whether a target is a small, local store to expansive corporations yet to go public, understanding value is crucial.There are two challenges dealmakers face when accessing private company value: 1) Scarcity of Public Data: The limited available data necessitates relying on assumptions, making valuations trickier. 2) Limited Market for L...
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What is Corporate Development? [Process & Strategies]

Corporate development (corp dev) is a function within a company that is responsible for identifying and executing strategic initiatives that drive growth and enhance the value of the organization.Corp dev teams are involved with analyzing and evaluating potential mergers and acquisitions, joint ventures, partnerships, divestitures, and other strategic opportunities that align with the company's long-term objectives.Corporate development professionals work closely with other departments within th...
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What Is Proprietary Deal Flow? [Challenges & Strategies]

The Grata team has hundreds of conversations with business development professionals a month. We know that the question top of mind for PE is this: how do I get my business development strategy to be more proactive? Here are some of the PE trends we've discovered and the channels that top firms are using to create proprietary inbound deal flow.‍Proprietary deal sourcing is the practice of identifying and securing investment opportunities that are exclusive and unique to a particular firm.A propr...
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How to Use AI to Source Deals

Deal sourcing, particularly direct outbound deal sourcing, can be a time-consuming effort for dealmakers. For the top firms there are even designated roles-- business development analysts-- who are specifically tasked with list creation and executive outreach. To effectively source deals, dealmakers need in-depth industry knowledge and impressive networking skills. How does AI fit into these aspects of deal sourcing?AI can't replace years of experience investing in a space, AI can't replace in-p...
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How AI Will Impact Private Market Investing In The Next 5 Years

Picture this: It's 2016. The world is buzzing with excitement over the advent of self-driving cars, virtual reality, and the prospect of colonizing Mars. Amidst the hype, a tech startup was founded on a different cutting-edge innovation that would soon revolutionize the private market dealmaking landscape. That startup was Grata, and the secret weapon was machine learning (ML).Fast forward to today, AI has become the talk of the town. While others scramble to catch up, Grata recognized its poten...
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Outbound Deal Sourcing & Origination Emails [Templates]

Direct outbound sourcing means sending a lot of cold emails.How do you, as an entry-level Business Development (BD) analyst, write emails to executives that not only get opened, but get responses? Effective outbound emails are essential for sourcing deals and making a strong impression. So let's take a look at the components that make up a great sourcing email, as well as some examples of real emails in action. Subject lines play a crucial role. It's simple: capturing the recipient's attention i...
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What is an Add-on Acquisition?

An add-on acquisition refers to a strategic investment made by a company to expand its existing operations, product portfolio, or market presence by acquiring another company that complements its core business. This kind of strategy can go by many names, sometimes buy and build, roll-up strategies (roll-ups) or bolt-in acquisitions (bolt-ins) are typically synonyms for add-ons where the acquiring company purchases a smaller company. This kind of M&A strategy is used by firms or companies in frag...
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How to Build a Better Buyer List

As deals slowed down this year, the words “deal sourcing” graced the headlines pretty frequently. But I think there’s an aspect of dealmaking that needs a little more love: exits. You know, the way you create returns for LPs.What’s tricky about exits is building a strong list of potential buyers. Why is this tricky? It’s deceptively difficult. Most dealmakers would shrug and say, “Easy. I know where to go for my lists.” But there are a few strategies you can use to build an even stronger buyer l...
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The Secret to Winning Banked Deals

There's a myth about winning banked deals. Then there's reality.There’s a myth about proprietary sourcing. That doing larger deals excludes any need for direct outreach to executives. The reality is much different.Let me explain.When a large, prominent company goes up for sale, they’re hiring bankers. No question. The deal will have high valuations, heavy due diligence, and lots of hands on deck to see the deal through.Most think the edge to winning these larger deals is having enough data to co...
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Better Headcount Data Means Better Deals

Access to better employee data means closing better deals for your firm.A bold statement. Seems akin to saying a better pen will make you a better writer. But the equation better data equals better deals holds water.Dealmaking is a numbers game. For every 1,000 companies you reach out to, you’ll likely see 1 closed deal. Access to private company information at scale changes the game. If you can accurately target more companies, you’ll have more options resulting in better deals getter done for...
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Outbound Deal Sourcing & Origination Emails [Templates]

Direct outbound sourcing means sending a lot of cold emails.How do you, as an entry-level Business Development (BD) analyst, write emails to executives that not only get opened, but get responses? Effective outbound emails are essential for sourcing deals and making a strong impression. So let's take a look at the components that make up a great sourcing email, as well as some examples of real emails in action. Subject lines play a crucial role. It's simple: capturing the recipient's attention i...
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Software-Enabled Companies: The Next Investment Opportunity

Software companies are lucrative targets for investors. The business model lends itself well to the buy-and-build strategy: low overhead, strong margins. That said, one of the most painstaking parts of investing in software companies is finding the companies that are private and bootstrapped before your competitors. It’s easy to Google the Top 100 software companies, but those companies are publicly traded (or well on their way). Here’s what’s hard: how do you find software companies before they...
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Due Diligence Checklist

By the time the due diligence process begins, you have basic company information in hand. You know the year, make, and model of this company but due diligence is the opportunity to open the hood and see what’s really going on underneath the surface.There are 6 types of due diligence: But before you begin any of these, you need to have a process in place for 1) How will documents and information be securely shared? And 2) Where will these documents be organized and available for your team to revi...
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How to Find Private Company Revenue Data & Estimates

Accurate private-company revenue data is crucial for dealmakers. Information about revenue provides decision makers with a more complete picture of their target company’s scale and how well it aligns with their investment criteria. But finding that data can be challenging, especially for investors focused on private companies in the middle market.Below, we dig into the various methods for calculating revenue estimates for private companies and the tools that can simplify the process.‍The most co...
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The M&A Software Helping Corp Devs Close Deals

Am I on the cutting edge, or am I buying into hype? Do I have enough tech for my team to compete but not too much that data becomes dispersed and unusable?These are questions that every leader in almost every industry is asking themselves and corporate development is no exception.Shreyans Parekh, Director of Strategic Initiatives and Corporate Development at a Fortune 200 commercial real estate firm, strives to strike the right balance between two extremes he’s seen in his years of experience bo...
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Deal Sourcing Process & Strategies [PE Firms, VC & More]

If you operate in the worlds of venture capital or private equity, or if you deal with mergers and acquisitions, deal sourcing is one of the most important skills you need to cultivate.David Paul, CEO and a Managing Director at DWP Capital, says, “Anybody can write a check. Everyone wants to get that founder high. Where the rubber meets the road is sourcing.”Deal sourcing is the process of finding companies to invest in. Traditional deal sourcing strategies involved referrals (word of mouth), ne...
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How corp dev experts are rising to the challenge.

Last month, I wrote an article called “When It Comes to Tech, Corporate Development Teams Are Playing Catch Up.” Consider this Part 2 in an epic saga.PE firms continue to lead the way on M&A technology, but there are corporate development leaders rising to the challenge. And thanks to our friends at Office Hours, a research tool connecting professionals through on-demand, expert interviews, we had the chance to talk to some of the pioneers of corporate dealmaking.Through our interviews, we quick...
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M&A BD teams acting like sales teams are closing more deals

Impersonating a sales department might just help business development teams close more deals.Only 9% of mass sales emails get opened, according to Gartner. Despite this fact, PE business development teams still send mass emails, customized with nothing more than an executive’s name.There’s a better way to do cold outreach: segmenting lists and leading with value. Sales teams have been experimenting with these strategies for years and found that open rates dramatically increase when an email educ...
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Who Are Venture Capitalists & What's Their Role?

‍Venture capitalism stands at the vanguard of innovation and entrepreneurship, playing a pivotal role in nurturing startups towards achieving lofty ambitions. A venture capitalist (VC) is more than just a financier; they are advisors, influencers, and often, the critical bridge linking an idea to its realization in the marketplace. With the tech industry booming, tech venture capitalists, in particular, have become the linchpins of progress, backing groundbreaking technologies and platforms that...
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