In our previous blog, we compared three company databases commonly used by VC, PE, and M&A teams. However, when we talk to investors, we often find that they struggle with company databases. The data might be good, but they have a limited scope, meaning you’ll never find all electrolyser component manufacturers that you are interested in. Also, company databases such as PitchBook and Crunchbase primarily include companies that have already received some funding, meaning you’ll never be the first to scout that cool direct lithium extraction company. If you recognize these struggles, a deal sourcing software might be the right solution for you! Keep on reading to learn more about the key benefits of dedicated deal sourcing software VS company databases.
The benefits of dedicated deal sourcing software
If you are looking to become a data-driven and proactive investment team, deal sourcing software should be a key part of your deal sourcing strategy. This type of software should help you identify, track and collaborate on analysing your market and finding the best deals.
Hence, we have created Catalist, our dedicated deal sourcing software. Although Catalist is partly a company database (it currently contains 10 million companies), it is also enormously different. As a dedicated deal sourcing software, it is focused on building custom and comprehensive market maps, smartly combining deal sourcing data from different sources, and automating information gathering as much as possible. To unveil the distinctive value that Catalist provides, we will compare it to more traditional company databases on the following topics:
- Search type - Broad vs Specific;
- Database scope - Closed vs Open;
- Company information - Generic vs Custom.
How deal sourcing software can help with targeted searches
Traditional company databases often use preset broad categorizations. All companies are bucketed into a specific category, which you can search in. This can be beneficial if you are looking for larger spaces like 'Artificial Intelligence' or 'Renewable Energy'. The downside is that very targeted, specific searches are often not possible. For example, looking for companies in 'plastic decontamination' won’t yield any results, 'plastic recycling' might, but it will create much noise, leading you to spend more time screening irrelevant companies.
Catalist works differently: we do not pre-categorize companies that sit in our tool. Instead, we allow users to search on specific keywords mentioned in a company’s website text, and related news articles. Due to its unbounded customizability, Catalist allows for any degree of specificity that is desired.
A common use case is to perform fast and efficient peer analyses: whenever you have an interesting lead, and you want to check if there are similar companies to compare your target with, you can perform a targeted search on Catalist.
Key takeaway: Catalist is more suited when looking for companies active in a specific space or offering a particular technology or feature; company databases, on the other hand, could be more suited when looking for a larger market or industry.
How to ensure completeness by integrating sources with a deal sourcing software
Most traditional company databases are “closed”: by subscribing, you get access to their database only and can make a limited selection of the companies that are relevant to you. The downside is that by checking on one company database, it is unlikely that you will be complete in mapping all relevant companies.
Catalist is a database too, but it critically differs from its counterparts in that it is openly built to facilitate the creation of your own custom database and make it as complete as possible. We believe there are no databases that contain all companies. Therefore, it is important to use a deal sourcing software that integrates several sources and databases that are likely to contain relevant companies. Catalist combines Crunchbase, patent databases, LinkedIn, all companies that ever made an account on GitHub, many industry sources, VCs, and more. But most importantly, it allows you to add other custom sources you find on the internet (industry associations, events, articles, RSS feeds). It can also run Google / Twitter / Cordis queries continuously for you, adding all results to the pipeline of your custom database. This increases the chances you will eventually be complete in your search.
A common use-case is to expand any list of companies that you may already have with similar companies; our analysts are trained to perform “reversed searches” and identify all potential sources that are rich in the companies that you are looking for, and scrape them to feed your dataset.
Key takeaway: Consulting one company database can be useful if you are looking to find some companies; however, if it is important to be complete then it is wise to integrate the results of multiple sources and use a deal sourcing software to assess them in a smart way!
How custom data can help to source the best deals faster
Most company databases provide detailed information that is checked and gathered for all companies. When generic company information is what you are looking for, consulting a company database is useful. The downside is that you cannot add and find information on companies that are not there yet, and they certainly won't create custom data fields for you.
Catalist is a platform that aggregates company information. Whenever Crunchbase, LinkedIn, Twitter, and other links are added, company profiles will be automatically enriched with information, saving you time doing this manually. Whenever you are missing a company, you can add it and Catalist will automatically fill in its profile with the information found through affiliated links. Although that means that sometimes a profile is not complete, the benefit is that you can also look for company information that is not pre-set. In our deal sourcing software, companies can be efficiently auto-enriched with specific custom information to check for investment quality signals based on website content. For example, you could categorize companies based on your specific custom requirements, e.g. on their core business, features offered, technologies used, focus industries, or anything else that could be retrieved by screening the text of the company’s website.
A common use case is to check for investment quality signals on the websites of a list of potential targets. This can be done with auto tags, which save you days or weeks of work and point you directly to the most interesting companies.
Key takeaway: In terms of standard company information, company databases might provide more complete generic information compared to Catalist. A deal sourcing software like Catalist, on the other hand, is more suited if your goal is to build your custom database and compare companies on more specific criteria.
Catalist: deal sourcing software that helps build a proprietary company database
To sum up, if you are looking for:
- Targeted, specific searches that do not fit commonly pre-set categorizations
- Complete lists of relevant companies, drawing from a wide variety of sources
- Custom information to check for investment quality signals that can be efficiently auto-enriched based on website content
Catalist, by offering a powerful combination of features and functionalities, is uniquely built to address your specific needs!
Lastly, company databases in most cases do not integrate deal flow management or collaboration capabilities.
- Catalist can work as a deal flow management tool, allowing you to build collections of companies, categorize them into custom groups, and assign deal leaders, statuses, documents, graphs, and so on.
- Catalist also enables smooth collaboration: making it easy to assess companies with your team, by commenting on companies, assigning a low, medium, or high relevance, or auto-assigning scores to companies based on whether they meet your criteria.