Deal origination bankers search for deals both on the buy side as well as working with private equity firms to find companies seeking investment or acquisition, and on the sell side (working with companies looking for funding or an exit). It’s not types of synergies only a key component of investment banking that is successful and is now required for all businesses seeking to expand. This article will look at the top dos and don’ts of effective deal sourcing, as well as a few practical strategies that startups are implementing to improve their efficiencies.
In the past time, firms relied heavily on deal flow that was created through their relationships and contacts with intermediaries and business owners. However, this is not an effective way to increase the number and quality of deal opportunities. It’s time-consuming and difficult to establish accurate goals and forecasts if the number of lead sources is not known.
Many investment bankers are now focused on outbound deal sourcing. This process involves looking for specific types in areas where the investment banker is knowledgeable and has a network of contacts. This is often done through online platforms like Axial which provide an online repository of deal information.
Many investment banks use technology to automate search processes, making the process of sourcing leads more efficient and efficient. This allows them to concentrate on building and managing their relationships with intermediaries, as well as improving their ability to find the right opportunities, qualify them and connect with the right investment opportunities at the right moment.