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  • Private capital
  • Intapp DealCloud

How The Pandemic Changed The Deal-Making Process – And What To Expect in 2021

The way we work with clients, manage investments, recruit talent, and prospect for new deals was completely upended last year, but will all of these shifts be permanent?

To say that 2020 changed the way we do business would be an understatement. Between the inability to conduct physical site visits, and a mass migration of talent throughout the entire country, and more, we’ve witnessed a transformation in the capital markets industry that will likely have short- and long-term effects. Given all of this change, what will the deal-making process look like as we head into the new year?

DealCloud recently sponsored a panel discussion hosted by David Rubinger, publisher of the Atlanta Business Chronicle, and featuring Stockton Croft, founding partner of Eagle Merchant Partners, Jonathan Goldman, founder and managing partner of Genesis Capital, and Lindsay Weaver, senior director of strategic business development for the Home Depot. The panel covered a wide array of topics during the discussion, and also shared personal experiences of how they adapted their businesses in light of the ongoing pandemic. Importantly, the panel also discussed their outlook for the year ahead and how the shift towards digital transformation will continue to affect their industries.

While the discussion was fast-paced and included perspectives on a range of issues, we’re recapped some highlights from the panelists in three important areas: sourcing and completing deals in a remote working environment, recruiting and retaining talent, and remaining competitive in the future. Below are some of the observations noted by the panelists and predictions for the year ahead.

The Unique Challenges of Sourcing and Completing Deals in a Remote Working Environment

Croft and Goldman noted how technology played an important role in being more efficient but being nimble and sticking to core values remained the most vital tools for success. As an example, Eagle Merchant Partners began working with Code Ninjas in June and rather than take a majority ownership position, became a lender instead. Taking a different approach like this would likely not have happened in a normal year.

In terms of technology, Zoom was also discussed throughout the conversation and the panel largely shared the same sentiments regarding virtual meetings: overall they have been a net positive. Croft noted how surprised he was with the effectiveness of Zoom as a viable alternative. Goldman discussed how the DealCloud platform facilitated workflows and efficiencies that had been talked about for years. In her experience at The Home Depot, Weaver mentioned how people were able to speak face to face arguably for the first time, as phone calls are typically the norm in the deal making process.

Additionally, Goldman noted how Zoom opened the door to some of his employees’ personal lives in ways that seemed taboo before – getting to meet family members and pets has been a nice experience. Conversely, the irony of discussing major deals with bankers who are not dressed for a traditional workday has been an adjustment.

Still, while optimistic about virtual meetings and expectations for them to continue in the future, the panel also noted the importance of physical site visits and how in-person meetings with the management team cannot be replaced. While these meetings can happen more sparingly, they can never be fully substituted.

Talent Recruitment and Retention

Another theme of the discussion was the impact of remote working on talent recruitment and retention. While talent pools can be expanded and are no longer constricted by immediate geography, a lot of great talent is moving to the Sunbelt states (and the Atlanta area in particular) for lower taxes and better quality of life. This will likely have a positive impact (especially for businesses in this area) when we do return to work.

With an expanded potential workforce, skill sets are being reevaluated as well. Tech and data capabilities are now becoming table stakes and interpersonal skills are more important than ever. Croft noted how important it is for junior staff to be able to sit with a CFO unsupervised – people skills remain an important differentiator.

When it comes to diversity, the panel agreed that hiring minority candidates is a priority and there are sincere desires to do this. Weaver discussed how important it is for the Home Depot associate base to reflect their customer base. At the same time, hiring the best people for the job is what matters most and companies should make every effort to find the best talent and inspire younger folks to work in financial services.

“Talent development is key. We look for every opportunity to have our younger team members lead deals with senior level oversight. This is what will keep our best talent from leaving.”

Keys to Futureproofing and Remaining Competitive

Lastly, strategies for remaining competitive and staying ahead of the curve were a big part of the discussion as well. For Home Depot, it’s vital to create a seamless experience across all channels while navigating unprecedented growth. For Genesis Capital, this involves staying nimble on business planning, knowing where the gaps in the market are, and making investments in people.

For Eagle Merchant Partners, futureproofing involves identifying macro tailwinds and then finding creative ways to go after those companies. This included a strategic investment in Planet Fitness despite a history of investing in restaurants. It also involves developing younger talent and inspiring them to lead deals with senior level oversight.

Looking to the year ahead, the panel was near unanimous in its desire to put COVID-19 behind us and is hopeful that 2021 will not be a repeat of 2020. But a return to normal is not expected this calendar year. Tech will remain a critical part of doing business in the year ahead and some shifts that occurred in 2020 are likely to be permanent – such as less time required in the office. While the deal making experience changed dramatically last year, new efficiencies were discovered, and teams came together in unexpected ways. Despite the circumstances, these are things that should be celebrated.

To listen to a replay of the Effective Deal-Making in 2021: A Digital Transformation panel discussion, click here.