The mergers & acquisitions (M&A) industry is a vast one. It covers both private and public companies as well as every type of private equity firm or organization on both the buy- and sell-sides of a transaction.
How those M&A deals come to be cannot occur without company data. And while public companies are required to share quite a lot of information about themselves to help inform (and often persuade) public investors, private companies are not.
Because of this, private company data (e.g., demographics, contact information, employee data, financial information) is strewn about the internet. Scattered, messy, and notoriously difficult to find and organize into company profiles, private company data is usually sourced through certain providers.
Before we dive into specific private company data providers, however, let's first discuss why private company data is so important and how it helps the M&A process.
The simplest explanation for why private company data matters is because the M&A process cannot happen without data. When a private equity firm is searching for a company to invest in, "no data" essentially means "no deal."
Think of it this way: Private company data can encompass any piece of information about a company. Its executives, their hire dates, tenure, employment history, previous successful exits, etc.. Extrapolate this kind of depth across any part of a business — financials, employees, location, products, etc. — and you get a picture of how much data is potentially available.
Without private company data, dealmakers can't find or vet potential investments for their firm. Without contact information for those investments, the team won't know who to contact. Without financial information, it's impossible to know if the company is a good potential investment. (You get the picture.)
Data is how you have sound decision-making, since you can base decisions on cold, hard facts rather than subjective opinions and guesses.
Of course, just because there is the potential for a lot of data doesn't mean it's readily available. While it's said "the Internet never forgets," it's also true that the Internet is not a self-organizing entity. As such, private company data is scattered and often outdated, if you can find it — private company revenue is particularly elusive.
Unfortunately, simply finding data isn't enough, either. You must consider data quality, integrity, and accuracy as part of your data analysis processes. After all, if you put bad data into an algorithm or even manual data analysis, your results will be inherently tainted.
To help overcome the challenge private company data presents M&A organizations, there are many private company data providers available. Most tout the number of data points they have within their databases and especially promote their data's freshness and accuracy.
The problem with most providers, however, is they provide orphaned data. Knowing where information came from is often as important as the data itself. Without this context and history, dealmakers may try to fill in the blanks and assume a company's journey and place within the market.
Sources-first data flips traditional data presentation on its head by providing an interconnected web of actionable insights with all the context your team needs behind each data point. With sources-first data, firms can build rich, robust company profiles and get both a macro and micro view of the company and its industry.
Throughout the M&A process, dealmakers can use private company data to augment their processes and make smarter decisions.
Keeping abreast of industry trends is a crucial part of any firm's day-to-day activities. From identifying trends based on historical information, to tracking current events and forecasting future possibilities, data is a large part of how firms map and research their target markets.
This practice includes competitor analysis, too. Analyzing your firm's competitors in addition to your potential and current portfolio companies' competitors is key for either building or extending your competitive advantage.
Real-time information is especially important in market research. Knowing what's happening as it happens, both for the overall market as well as your firm's particular focus, will help you make more informed decisions. Luckily, you can often set up automatic notifications with private company data providers to help your team prevent being surprised when important news happens.
As much as firms love inbound deals — when potential investment opportunities come to you looking for a transaction — they're not reliable enough to fill your pipeline. Plus, just because an inbound opportunity shows up doesn't mean it's a viable deal.
All opportunities, no matter their source, require vetting. That said, when you directly source deals yourself, you have far more control and can often transact much more consistently. Of course, outbound deals simply don't happen without private company data.
With the right information in your team's hands, they can source more deals, more easily reach out to potential targets, and better vet the opportunities that show promise.
While private equity firms are becoming more niche, nearly all operate within the middle market (between $50m and $1b in annual revenue). This rather wide margin means having estimated revenue before you get to due diligence means a lot less wasted time in earlier stages of the M&A process.
Even with a private company database, however, company financial statements and information can be tricky to pin down. Most organizations, then, turn to data signals to help better identify a deal's promise. For instance, if a company recently made several key executive hires, you may infer that they are gearing up for a founding round or looking to spur growth in the next few years.
The inherent risk in M&A makes having data particularly valuable. Only when you understand the full breadth of the transaction you're trying to close can you make the right decision about whether to move forward with it.
Your team must completely understand the target market — including its competitive landscape — as well as the strengths and weaknesses of your target investment. Culture, product development, organizational processes, historical growth, potential roadblocks, and more all help you better understand the deal and the risk it could pose to your firm.
With a thorough understanding of private company data and its role in M&A, dealmakers must then know where to find it. Luckily, all companies, whether private or public, market themselves in some way.
Major revenue milestones, key hires, product launches, important partnerships, etc., are all often announced online through many different sources: social media, company and industry award lists, news, press, and more. There are also third-party sources, such as conference lists and buyer's guides, that dealmakers can use to find key pieces of data.
However, the problem isn't usually how much data is out there, it's how to find it. Let's take a look at some of the top private company data providers.
There's no shortage of social media channels, and while they have a plethora of information, they can be an extremely time-consuming and manual private company data provider. Unfortunately, discoveries often rely on your team being in the right place at the right time to catch an announcement or post, though there are services that can alert you of new information.
Social media, however, serves multiple purposes. In addition to being a source of information, it's also a method for outreach. Just make sure to choose the right channel for your target. LinkedIn, Bluesky, X (formerly Twitter), Instagram (especially for certain industries), TikTok, and YouTube are all viable options.
If your firm operates internationally, make sure to research the most popular channel (e.g., BiliBili in China and WhatsApp in Germany) in the countries in which you do business.
Search engines will almost always be a top private company data provider, even as algorithms and artificial intelligence (AI) change what results show up. Having good search practices will help you find more information about your target investments, and may uncover some hidden gems. Get creative with your topics, too. Consider searching for alternatives to a popular company, such as "Alternatives to Salesforce"), to identify potential up-and-comers.
An increasingly popular alternative to the more traditional search engines is the AI services themselves. You may consider asking ChatGPT what it "thinks" about a particular industry or to help you search for information. Just take everything it returns with a massive grain of salt and double-check its data, as the technology is still very far from perfect.
In addition to searching for specific pieces of data, a company's website is a good source of information, especially since it will help you understand what the company wants others to know about it. Pay particular attention to what pages they've published, how they speak about themselves, and what marketing tactics they use.
While not quite as popular a tactic as in years past, many companies still partake in announcing key company updates through press releases. Company or product launches, funding rounds, executive hires, major milestones, etc., are all prime topics that companies may release an announcement about.
Third parties will often share their own information, like keynote speakers or high-profile attendants at a conference, analyst reports, and more. Use the listicle content marketing trend to your advantage, too. "Top company" lists (like Forbes' Largest Private Companies list and Sourcescrub's Best of Bootstrapped) and industry award lists are all great sources of information.
While manually scouring the Internet is certainly an avenue for finding information, dedicated private company data providers and databases are often a far better (and more efficient) option for your dealmakers. But not all are created equal.
For instance, ZoomInfo and Crunchbase are fantastic general company intelligence tools that have lots of information available. But the data points they have may not be as updated as your team needs and each service usually has a particular specialty (e.g., ZoomInfo focuses on company contacts while Crunchbase focuses on investments and funding rounds).
A little more sophisticated than general intelligence tools, private company databases such as S&P Global and Moody's (formerly ORBIS) have millions of data points from thousands of sources. But these data points often don't paint a full picture of a company, and creating full profiles is usually more difficult. It's also important to note these databases present data as-is, and may need some extra cross-checking with other private company data providers.
The best option for most private equity organizations is a deal sourcing platform like Sourcescrub. These platforms give you both the data points you need plus the all-important context to comprehensively paint a picture of your team's potential investment companies. Some deal sourcing platforms are also AI-powered to make them even more efficient at finding and providing accurate, up-to-date data. Just make sure they're keeping humans in the loop to counteract the pitfalls of current AI limitations.
No matter your firm's focus in M&A, there are many private company data providers that can help you find your next deal. But what sets the "OK" providers apart from the great ones is how much time they'll help you save and the quantity and quality of opportunities you'll find.
Understand what separates the best platforms from the rest of the bunch with our buyer's guide checklist and elevate your deal sourcing today.
