Need To Meet

David Teten, CEO, Navon Partners

David Teten, the CEO of New York-based Navon Partners, would one day like to start what he calls the Institute for Irrefutable Ideas.

It would be dedicated to bringing about tax simplification and other “initiatives that no reasonable person would object to,” said investment banker Teten, whose 2005 book, The Virtual Handshake: Opening Doors and Closing Deals Online, has sold some 8,000 copies.

Surely an irrefutable idea in the world of private equity is that deal origination could be a lot more efficient. Picture phone banks manned by associates cold-calling the owners of companies, or deal-origination partners sending holiday cards to thousands of investment bankers and deal intermediaries. Buyout firms review some 80 opportunities for every one they end up closing, according to a research study lead-authored by Teten and recently featured in Harvard Business Review.

Deal origination sounds like a great candidate for modernization. But by and large buyout firms have remained far from the cutting edge of social networking, CRM and other technologies that could help generate targeted deal flow, according to Teten. Some buyout shops have yet even to put up respectable Web sites. One reason, Teten said, is the prospect of receiving “irrelevant inquiries of all sorts” from people who wouldn’t be of much help. But Teten said there are exceptions.

Take growth-equity investor HealthpointCapital, a New York firm with a focus on orthopedics and dental device companies. The firm’s Web site features a blog with several entries written by Lauren Uzdienski, an employee whose primary responsibilities include blogging. A waste of time? Well, say you’re the owner of an orthopedics company toying with the idea of selling and you Google “orthopedics M&A.” First on the list of results is a page of news items hosted on the HealthpointCapital Web site. “That’s an example of the power of targeted Internet content generation,” said Teten.

Teten has plenty of similar stories up his sleeves. They include one about how a principal at Hamilton Robinson Capital Partners generated a lead in 2002 after placing an ad for executives on the Darden School of Business job board—what Teten refers to as a “gated executive community.” As a result, the firm closed on an investment in Black Clawson Converting Machinery about 10 months later, according to Teten.

Whether the Institute for Irrefutable Ideas remains a quixotic dream remains to be seen. For now, Teten is pitching another brainchild—a service called DealSignals that uses technology to identify well-run companies whose owners are likely to be receptive to a deal pitch.

Phone: 845-418-3836


Twitter: @dteten