• Corporate Development
  • Intapp DealCloud

How to improve corporate development deal velocity 

Deal sourcing and business development are top priorities for corporate development M&A teams, but many of these teams fail to recognize the importance of corporate development deal velocity — the measurable speed at which deals enter the pipeline, advance, and close. 

Here, we take a closer look at why deal velocity matters and how your corporate development firm can effectively measure and improve it. 

Defining and measuring corporate development deal velocity 

Firms can calculate deal velocity by using this formula: Targets sourced × Potential deal value × Win rate / Time-to-close = Deal velocity 

Many corporate development teams don’t track the variables that make up the deal velocity formula. But with a deal management system like Intapp DealCloud, you can easily access these metrics in real time. 

DealCloud provides teams with on-demand access to: 

  • The number of qualified targets your origination team has sourced in a given period of time 
  • The potential value of each of those deals 
  • The current win rate for those deals 
  • The time it took each successful deal to close 

Leveraging such information allows you to monitor, measure, and, subsequently, improve your deal velocity. 

Take, for example, Jeremy Segal’s team at Progress Software, which analyzes between 300 and 400 deals per quarter to execute their acquisition strategy and enable better decision-making for more profitable deals. 

“We use Intapp DealCloud to do weekly check-ins with my team to get a good feel for the different activity we have from a M&A standpoint,” Segal said. During these check-ins, they ask themselves the following questions: 

  • Which companies do we want to reach out to? 
  • Which companies did we have dialogue with? 
  • Which companies could move down the funnel and potentially become prime M&A targets for us? 

Segal, his executive team, and members of the Progress Software Board now have real-time access to the metrics they need to calculate a deal velocity number at any given time. “By using Intapp DealCloud, we are better able to manage and keep track of our deal flow,” said Segal. 

Why deal velocity matters 

Many deal pipelines are clogged with deals that have stalled or been shot down midtransaction, which hinders more promising, profitable deals from closing. Don’t waste your time, energy, and resources on unqualified or doomed deals. Instead, identify and dismiss (or table) these deals before they cloud your pipeline, so you can create a clear path for new and better deals to close

You’ll also want to maintain a strong, ongoing flow of potentially profitable deals. Constantly measuring and improving deal velocity helps speed up your deal flow and increase momentum. The stronger the flow, the less likely it will slow or stop. To successfully maintain this speed and momentum, you’ll need to rely on purpose-built technology and infrastructure

Your technologies and process are like the banks of a river: If they’re strong and deliberate, the river can cut a deeper channel, enabling more flow. Indeed, some of the most profitable deals are those that “sail” through the pipeline unbothered by the turbulence of the slower, noisier deals. The tools and processes (“riverbanks”) help these deals maintain their momentum, increasing the likelihood that they won’t get stuck in the pipeline and put on hold indefinitely. 

Granted, some deals will simply be troublesome and require extra time and attention, no matter how robust or modern your tools and processes. The speed and momentum of the uncomplicated deals allow you to allocate the extra talent and resources to those struggling transactions. 

How M&A teams (and inefficient processes) inadvertently slow down deals 

Strategic acquirers are often measured by how many deals they close, which puts pressure on them to continually fill the pipeline. But solely focusing on filling the pipeline can have unintended consequences. 

They only measure time-to-close 

Perhaps the most common mistake strategic acquirers make when trying to improve deal velocity is zeroing in on the length-to-close variable, rather than considering the other elements of the deal velocity equation. 

Strategic acquirers that get hyperfocused on shortening their average time-to-close may accelerate their transactions, but at the expense of deal quality and synergy realization. Pressure intensifies when competing with financial buyers, who can often write checks quickly without requiring as much due diligence work as their synergy-creating counterparts. 

They fail to automate tedious, mindless tasks 

Another deal velocity encumbrance is when teams cling to old, clunky, disparate workflow tools that waste valuable time. Avoid the trap of using old tools and processes that your team (and the environment) has outgrown; instead, invest in modern, purpose-built technology like DealCloud. 

DealCloud does much more than manage information: It’s built with a variety of event- and time-based automations that quickly and effortlessly enable efficient M&A work. Your team can then allocate time, effort, and resources toward more pressing tasks, bringing more value to your firm. 

They tolerate snarled collaborations 

Healthy, smooth collaborative processes boost morale and productivity. They also greatly enhance deal velocity by ensuring no one spends too much time untangling miscommunications or searching for answers to questions like: 

  • How was I supposed to know that? 
  • What’s the status of that deal’s Day One readiness? 
  • Whose turn is it to approve this step? 
  • Is this a level-one decision, or do we escalate? 
  • Who talked with the target’s owner or CEO lately? When and what about? 
  • Who’s managing our adviser and consultant relationship? Have we updated them? 
  • When can we expect the next step to happen? 
  • What are we waiting for right now? 
  • Which target currently needs our attention most and why? 
  • Why are the executive sponsors and/or board members pausing approvals at this moment? What’s happening? 
  • Where are we overloaded with work right now? Who has bandwidth today? 
  • Is this deal sheet up to date? 

Answers to these questions should always be readily available to team members when they arise. In fact, by using DealCloud’s automations, you can ensure that key information appears on team members’ DealCloud dashboards in real time. 

Unclog your pipeline for seamless and higher-quality deals 

Tomorrow’s closings depend on today’s deal velocity. Avoid the aforementioned deal velocity frustrations by following these tips. 

Measure deal velocity using this new formula 

Use our deal velocity equation to improve morale by unifying otherwise disparate metrics into a shared goal: Targets sourced x Potential deal value x Win rate / Time-to-Close = Deal velocity 

Currently, many organizations use siloed performance measurements for each of their teams. For example, the origination team is applauded for their leads sourced, the due diligence group is rewarded for producing more target information, and the project managers get the kudos for win rates or time-to-close. But a teamwide metric like deal velocity reflects how well your team performs as a whole. 

Tracking all the variables in the deal velocity equation also improves visibility. With this formula, you can account for the nuances of a measurably improving deal flow. Imagine omitting your win rate or number of deals sourced, for example. If you try to measure without these variables, then you miss out on the opportunity to optimize them and, consequentially, improve your deal velocity. 

Automate time-consuming tasks 

In addition to managing information and workflows, DealCloud also automates a large number of tasks, including: 

  • Insight-full reporting — Trade PDFs for dashboards that reflect only the most relevant information, and update them as you view them. 
  • Approval processes — Rather than sending PDFs during the internal approval process, you can use email forms that prompt your executive sponsors or board members to express their approval or disapproval for a deal’s progression. Their replies will feed directly to the deal sheet for everyone to view instantly. 
  • Task handoffs — Let team members assign tasks (with due dates) to one another to keep things moving. 
  • Contact information imports and updates — Leverage DealCloud’s seamless integration with Microsoft Outlook to link people and their data with deals and other details. 
  • Market research — Sign up for relevant developments in comparable marketplace deals to land in your inbox, so you don’t need to hunt for them every time you need them. 
  • Vendor relationships — Manage expectations and automatically keep service providers informed, so you can work on more value-adding work. 

Improve collaboration 

Planning more meetings, asking HR to launch a , or tying performance bonuses to collaborative processes are all outdated methods of improving your group’s internal teamwork. The best way to improve collaboration, productivity, and morale is to push teamwide adoption of your new information and deal flow management system. 

DealCloud’s automation and data management capabilities makes it easy for team members to collaborate and collect the variables they need — resulting in a stronger, healthier deal velocity. 

The new formula for M&A deal velocity 

Measuring and managing your firm’s corporate development deal velocity is the first step to clearing space for new opportunities. 

Share this formula with your team and service providers. Share your starting deal velocity number with us on LinkedIn and tell us what deal velocity number you’d like to work toward in the future. We’ll cheer you on and hold you to it! 

Learn how Intapp DealCloud helps improve deal velocity by scheduling a demo today