How Private Equity Firms Can Make the Most Out of Conference Networking

Conferences are a critical part of the dealmakers’ toolkit. Networking is as much a science as art and putting a basic structure in place can help focus your limited conference budget on the right conferences, and get the most out of your connections. The question is how to do it.

Picking the Right Events

Most firms already have a good sense of what the most important events are, but Navatar in partnership with data providers such as DataFox helps you evaluate events based on attendees. The objective is to find events with the “highest prospect density”, meaning ones with the most LPs, intermediaries and target company CEOs you would like to meet or reconnect with. How do you know which prospects you’ve met? Navatar automatically cross-references the list with your relationship history data to show each prospect you or someone else at the firm has had coffee with, how that meeting went, or if they represent a new face to meet.

Some firms take things one step further. After identifying each prospect, and their history with them, they apply another layer of due diligence to score each prospect’s potential “value” to the firm. Prospects with higher scores accordingly tilt the scales in favor of one event over another. A prospect’s value can be measured in a few different ways depending on the firm’s needs:

If, for instance, an intermediary who has provided historically strong deal flow was attending Private Equity Summit 2018, that may get priority compared to a similar summit.

At the Event

With the right event in mind, the next step is to incentivize your team members to network effectively and as much as possible. The trick is to have each team member systematically track their touchpoints with prospects, and reward team members based on a prospect’s present and future value to the firm.

Here’s how it works: Ted the analyst attends Private Equity Summit 2018. Using his list of prospects, he works the room to find a potential new LP, the CEO of a new target company, and a M&A banker who pushes an interesting new healthcare company. From his mobile phone, Ted logs the new contacts and leads into Navatar.

What this provides Ted and others is a clear record of who each person met, and an objective reference for how their performance will be evaluated. This performance, tied to their quarterly bonus, can be quantified using a simple scoring system (one prospect equals one point) or something more sophisticated like before. For instance, no deal opportunity is created equal, so contacts that prove to deliver deals better suited to your sector and investment criteria may pay higher than those that do not.

After the Event

Our scoring system has the added benefit of making it easy to calculate the event’s ROI. Simply combine Ted’s points with everyone else who attended the event and you have a score of its value. Then convert expenses like air travel and cost of tickets into negative points and you have all the variables you need to produce a final return on investment. Different firms will use different methodologies.

This final score serves three purposes: quantifying the event’s value, providing a new reference point for when the firm must decide if they should go again next year, and comparing event opportunities under one standard.

The beauty of the system is that, paired with the right platform and practices, one can systematically evaluate events over time to refine the ROI. For instance, by tracking an intermediary’s quantity and quality deal flow, one can retroactively reevaluate the banker’s contribution to your pipeline, ensuring the partner who introduced him to the firm is accurately credited for the relationship.

It’s no secret deal competition has escalated in recent years, forcing private equity firms to look for new competitive edges. The industry’s original stalwarts could rely on their networking skills and charm at conferences to build rolodexes and source deals unavailable to the wider market. In today’s tech age, new data points are refining that skill to those willing to claim it.