Deal origination is the process of searching for deals on both sides (working with private equity firms in order to find companies to invest in or acquire) and on the sell-side (working with companies looking to raise funds or sell). It’s not only a fundamental component of successful investment banks but has become a critical necessity for all businesses looking to grow. This article will explore the top dos-and-don’ts for effective deal-making and also some strategies that young companies are using to improve their efficiency.
Traditionally, businesses have relied heavily on inbound deal flow, which is sourced through their relations with intermediaries and business owners. However, this is not a reliable way to scale the quantity and quality of deal opportunities. It’s a lengthy process, and it’s hard to create accurate forecasts and goals when the number of lead sources available can be unpredictable.
Many investment bankers are now focussing on outbound dealsourcing. This approach involves looking for specific types in areas where the investment banker is knowledgeable and has a network of www.digitaldataroom.org/what-is-operating-synergy/ contacts. This is often done through online platforms like Axial which provides a central repository of deal information.
In addition to this, many investment banks employ technology to automatize their search processes and make sourcing leads much easier and more efficient. This allows them to concentrate their efforts on establishing and managing relationships with intermediaries, while also improving their abilities to determine, qualify and connect with the best investment opportunities at the correct time.
