14 Questions to Ask Before You Buy an Institutional Investor Database

By: Amy Sariego

Imagine finding the perfect piece of software that will totally transform how you and your team do business. Whether it’s a CRM, a new institutional investor database, or something else entirely, you know — without a doubt — that it will be worth your company’s time and money. 

If you’ve had this eureka moment before, you already know what comes next: the pitch to the team, and of course, the questions. We can promise that there will be plenty of questions, regarding everything from cost and functionality to implementation and then some. 

It can seem overwhelming, but it doesn’t have to be. 

Here at Dakota, where we’ve raised over $30 billion since 2006, we’re no strangers to buying (and as of 2018, selling) institutional investor databases. So, we’ve faced our fair share of questions, and we know how to answer them. 

Our first piece of advice? Always be prepared. 

To help you do just that, in this article we’ll break down the questions you should be asking your team and your potential database partners before buying an institutional investor database. And, of course, providing our answers and insights to those questions. 

By the end of this post, you’ll have all the answers you need to crush any questions that come to you, so that you can move forward and start transforming the way your team uses data as soon as possible.

 

Questions to ask your team before you subscribe to an institutional investor database

1. How many accounts and contacts do you need?

Some databases (like Preqin and Discovery Data) are bigger and have more accounts and contacts within them, while others are more scaled down and focused on specific channels (like RIA Database or Dakota Marketplace). Once you know the extent of your team’s needs and goals, you’ll be able to decide which institutional investor database is best for you.

2. What is your budget?
Institutional investor databases typically range in price from $5,000 to $15,000, which can make a significant difference for some firms. Knowing where you fall in this range, as well as how many licenses you will need will help narrow down the pool of options.

Next, we’ll talk about the questions you’ll want to ask a salesperson as you explore your institutional investor database options.

 

What to ask an institutional investor database provider

1. What channels does the database focus on?
Like we mentioned at the top of this article, databases come in a variety of specificities and sizes. Some cover multiple channels, while others are more specific. Asking a salesperson right off the bat which channels their database includes is the fastest way to know if they meet your team’s needs.


2. How up to date and accurate is the data within the database?
When it comes time to present a new database to your team, this is definitely something they’ll want to know about.

Databases are often thought of as stale and outdated, but that’s not always the case. In fact, we’d argue that in most cases it’s not. However, some databases are updated weekly or even daily, while others are bigger and therefore take more time to update. Knowing what you’re getting into up front is important, because if a database isn’t updated frequently, it might require your team to intervene in the interim. This isn’t a downside exactly, but it is something to be aware of.


3. What contacts are in the database, and are their titles up to date?
In our experience, most investment sales people want access to due diligence contacts. However, no matter what your team is looking for in a database, asking up front what types of contacts, including roles and job titles, are included will save you time in the long run.


4. How is the user interface designed?
Additionally, is the interface intuitive? Can you access the information you need easily?

We’ve found that in a lot of cases, if a database is difficult to navigate, or if salespeople can’t find relevant information, they won’t adopt it, resulting in a lot of wasted money and time. Knowing that a system is user-friendly and meets the needs and capabilities of your team is critical in moving forward with any new product, but especially one that directly relates to sales.

5. How long does it take to implement?
Knowing how much time and how many resources will be involved in implementing a database will help your team plan and make arrangements for the new system, without any unexpected bottlenecks arising. In many cases, implementation takes a day or less, but can vary depending on the number of user licenses involved.

6. What does it cost? 
And does the base price change depending on the number of licenses purchased? These tend to be the first questions decision makers ask about a new product or service, and the hardest answer to find on a lot of websites. Asking about price, as well as how it relates to license, early on will save you time and keep you on-budget.

7. What channels are included in the database?
A more general database will include a variety of channels, including public pensions, foundations, endowments, RIAs, and others. If you are looking for information on a specific channel, it’s important to know early on if it’s included in a potential database subscription.

8. Will I have to update it myself?
The hardest part of having access to data is knowing that, at some point in the not so distant future, it will become outdated. Contacts will change jobs, or change roles within their current firm, and you won’t know about it. As salespeople, we feel this frustration, too. Asking up front if you’ll need to manipulate and update data yourself, or if it is updated regularly for you, is critical.

At the end of the day, the answer to this question can mean the difference between saving your team time and costing them time.

9. Does the database have investment preferences and account descriptions?
When it comes to institutional investor databases, it’s not just the accounts and contacts that matter, but the detail surrounding them. Investment preferences and account descriptions makes any salesperson’s job easier.

10. Can it connect to a CRM?
Having a CRM and a database is the ideal setup for an institutional investment salesperson. However, having a CRM and a database that can speak to each other is even better, and can make your team even more efficient. Asking up front about these capabilities will help determine which database is right for you.

11. Do you include any search capabilities? 
Being able to quickly locate what you need is important, especially if you have limited time to research.

12. Do you have any mapping functionality?
This comes into play when you’re planning a trip to a particular city, and want to make the most of your trip by scheduling as many meetings as possible while you’re there. A maps feature in a database allows you to add that additional layer of efficiency without leaving the application.

13. How do you get the data, through web scrapers or by hand?
This is another question that comes up a lot when databases are being considered. How the data gets in the system and how it’s updated makes a difference. If it’s being pulled in by web scrapers, there is the potential for inaccuracy, while if it’s being updated by an in-house team, it is likely being done more carefully, leaving less room for error.

14. What types of salespeople use this database? 
Do other people in your industry use this? Can this vouch for its accuracy and usefulness? Many firms like to know they’re not alone in using a particular product, and databases are no different. Knowing that other firms of your type and size have used a database can help bolster confidence internally. 

How to bring the idea of an institutional investor database to your team

You’re here wondering what questions you should be asking before you buy, and now that we’ve answered them, here’s your next step: start evaluating your options using the above criteria, so that you can narrow down your choices and start setting meetings.

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