A target is not a lead: the four numbers your CRM does not have

Most acquisition pipelines start life in a sales CRM, because that is what the firm already has. It works for a while. Then someone asks a simple question, "what is the combined EBITDA of everything on our shortlist?", and the answer takes an afternoon and a spreadsheet.

The reason is not that the CRM is bad. It is that a sales lead and an acquisition target are different objects that happen to look alike. Both have a name, a contact, a stage and a next step. But a lead is measured by what it is worth to you: the deal value, the probability, the expected close. A target is measured by what it is: its revenue, its EBITDA, its headcount, its valuation. The CRM knows the first set. It has no fields for the second.

Four numbers, one rating

A target file needs four numbers next to the name: revenue, EBITDA, number of employees and the valuation you currently attach to it. Those are the numbers a partner asks for on the phone. They are also what turns a list of names into a pipeline you can add up: total EBITDA on the shortlist, total in due diligence, total in negotiation.

On top of the numbers sits a rating, A, B or C, and a stage from long list to closed. The rating says how much you want it. The stage says how far you are. Keeping the two apart matters: an A-rated target on the long list is a different action from a C-rated target in negotiation.

Zonneveld Beheer B.V., Netherlands, facility services
Revenue € 18.4m, EBITDA € 2.1m, 140 FTE, valuation € 12m
Rating A, stage negotiation, callback 15 Sep: "final offer"

The callback is the whole game

The single most useful field on a target is the callback date, with a note on what the call is about. Acquisition sourcing is patient work: a founder who is not ready this year may be ready next year, and the firm that calls on the right day is the one that gets the conversation. A list where targets with a callback due sit at the top, oldest first, turns a database into a work list. Nobody has to remember. The list remembers.

Keep the boundary clean

The trap is to rebuild the CRM inside the target tool: notes, contacts, documents, tasks. Don't. Those already exist, and the target should lean on them, with one link from the target to the relation it eventually becomes. What the target tool adds is exactly the part the CRM lacks: the size of the company, the rating, the stage in the acquisition process and the callback. Precisely that, and nothing more, is what makes it stay useful after the first year.