Deal flow – how to bring in more clients steadily and efficiently.
The other day, a client came over and asked us about venture partnerships and how they worked.
We explained that a venture partnership was essentially an affiliate program for funds and accelerators.
The venture partner brings in clients and/or investments and splits the success fee or payment (or both) with the fund or accelerator.
That’s all nice to know, but what is a deal flow and how does one create one?
What is a deal flow
It’s a measure of rate in which a fund or accelerator may gain proposals.
For example, using the right partners or marketing channels, a fund could gain more access to startups in its niche.
The startups might also be qualified (potentially) for funding (answer the basic criteria).
Would they necessarily become clients?
Only if the right sales and marketing funnels are in place.
The deal flow may also refer to partners, which also need to be qualified.
Would they be relevant for the brand, DNA and vision? Maybe.
You got some work to do!
Sales Funnels for Funds (SFFs)
Once a deal flow has been established, your team needs to qualify each and every proposal it gets.
Sometimes those are shots in the dark, where half-baked startups mostly ask questions and are yonders behind a potential investment.
Sometimes those are calls for partnerships, which may or may not benefit the fund or accelerator.
Your team should know what your criteria are for investments and partnerships.
Whichever the case is, your team should understand whether or not it may improve your brand or ruin it.
Marketing Funnels for Funds (MFFs)
In order for your qualifying team to actually qualify deal flows, you must focus on what you are trying to achieve:
- Who is my ideal startup/partner
- What does it do/focus on
- Is it scalable
- Is my message clear enough to convey that
Once all of these questions are answered and your message is in its clearest form, you should then start your qualifying process of both the startups as well as the partners coming in.
If the fund has the funds for it (no pun intended), then it should allocate those to bring in the right principals and the right business development managers who will take over the startup qualifying process and the partner qualifying process, respectively.
It sounds good
All deals in the right package may sound good, but you must look beneath it all and try to find the hidden costs:
- Is it a one-way street
- Is it perpetual
- Do you need to pay for it
- Does it hurt your brand
Partnering with the wrong partner could lead not only to bad blood and lawsuits but a future loss of revenue and ultimately, reputation.
Don’t forget that the deal flow should be qualified by your criteria, not the partner’s(s’).
Don’t be tempted to sign deals with everyone you may encounter; do your due diligence, confer internally and only then decide on the course of action.