The Sector Coverage Playbook

Sector coverage means knowing every company that fits your investment criteria in a given industry vertical—not just the obvious ones, but the hidden gems that haven't hit anyone's radar yet.

The Coverage Advantage

Firms with strong sector coverage: - See opportunities earlier - Engage companies before formal processes - Build relationships that pay off years later - Have informed perspectives for every conversation

Coverage Components

Complete sector coverage requires:

1. Company universe: Exhaustive list of companies in the space
2. Company intelligence: Key metrics and context for each
3. Relationship mapping: Paths to reach each company
4. Monitoring: Alerts when something changes
5. Engagement history: Record of all interactions

Before building coverage, define what you're looking for. Vague criteria lead to unfocused coverage.

Profile Components

1. Industry vertical: Specific sub-sectors, not broad categories (e.g., "healthcare IT for ambulatory surgery centers" not "healthcare")

1. Business model: Revenue model, customer type, go-to-market approach

1. Size parameters: Revenue range, employee count, growth rate

1. Geography: Headquarters location, operational footprint

1. Ownership structure: Family-owned, founder-led, PE-backed, corporate subsidiary

1. Stage: Growth stage, maturity of operations, readiness for ownership transition

Example Profile

"B2B SaaS companies selling to mid-market manufacturing companies, $15-75M revenue, growing 15%+, headquartered in the Midwest, founder-owned with succession planning needs."

Why Specificity Matters

Specific profiles enable: - More efficient company identification - More relevant outreach messaging - Clearer prioritization decisions - Better tracking of coverage progress

The goal is to identify every company that fits your profile—not just the ones you already know.

Primary Sources

1. Industry databases: D&B, PitchBook, PrivCo, and sector-specific databases

1. Trade associations: Member directories often reveal companies absent from commercial databases

1. Conference attendees: Industry event exhibitor and attendee lists

1. Customer lists: If you know who buys from the sector, work backwards to suppliers

1. Competitor research: Look at who competes with known companies

Secondary Sources

• News and press releases
• Patent filings
• Job postings (companies hiring often match your growth profile)
• Social media and LinkedIn company pages
• Government contractor databases

Validation Process

Not every company will fit your profile. Build a quick validation checklist:

• Confirm industry fit
• Estimate size (revenue, headcount)
• Verify ownership status
• Check for recent transactions
• Assess relationship paths

Building the List

Start with commercial databases, then layer in secondary sources. For a typical mid-market sector, expect:

• 50-200 companies that closely fit your profile
• 200-500 companies in the broader space
• Ongoing discovery of 10-20 new companies quarterly

You can't pursue every company equally. Prioritization ensures focus on the highest-probability opportunities.

The Prioritization Matrix

Score each company across two dimensions:

Fit Score (0-10) - Alignment with investment criteria - Attractiveness of the business - Estimated size and growth - Ownership situation and timing

Access Score (0-10) - Strength of relationship paths - Number of paths available - Quality of the best path - History of engagement

Priority Tiers

• Tier 1 (High Fit + High Access): Active engagement—pursue immediately
• Tier 2 (High Fit + Low Access): Build access—cultivate relationships
• Tier 3 (Low Fit + High Access): Monitor—may become attractive
• Tier 4 (Low Fit + Low Access): Passive—check periodically

Resource Allocation

Top-tier opportunities deserve concentrated attention:

• Direct partner involvement
• Multiple touchpoints per quarter
• Relationship cultivation across the organization
• Deep research investment

Lower tiers get scaled attention through more automated approaches.

Markets evolve. Companies change. Your coverage must stay current.

What to Monitor

1. Leadership changes: New CEO, CFO, or board members often signal transition readiness

1. Financial signals: Revenue milestones, funding rounds, profitability changes

1. Strategic moves: Acquisitions, divestitures, new product launches

1. Ownership events: Shareholder changes, estate planning activity

1. Competitor activity: Transactions in the space may create pressure or opportunity

Alert Infrastructure

Build monitoring into your workflow:

• Google Alerts for company names and key executives
• LinkedIn notifications for job changes
• News aggregators for industry coverage
• Platform alerts (Verata, PitchBook, etc.)
• CRM reminders for periodic check-ins

Response Protocols

Alerts are useless without action. Define response protocols:

• Leadership change at Tier 1 company → Immediate outreach
• Funding round in the space → Add to next coverage review
• Competitor acquisition → Research and share with team

Coverage Reviews

Monthly: Review alerts and update company records Quarterly: Full sector coverage review with the team Annually: Refresh the entire company universe