Deal origination and investment bankers are able to source deals both on the buy side and with private equity firms to find companies for acquisition or investment, and on the sell side (working with companies in need of financing or an exit). It’s not just a vital component of a bank’s success, but is now a necessity for all businesses seeking growth. This article will explore the most important dos and don’ts for successful deal initiation and some effective methods that the new generation of companies are using to improve their efficiency.
Traditionally, businesses have relied heavily on inbound deal flow that they sourced from their connections with intermediaries and owners. This isn’t a reliable method to increase the quantity of deals or the quality. It’s very time-consuming, and it is difficult to create accurate forecasts and goals when the amount of lead sources available can be unpredictably.
Many investment bankers are now looking at outbound deal sourcing. This approach involves looking for specific types in areas where the investment banker has knowledge and has a network of contacts. The majority of the time, this is done through online platforms, such as Axial, that provide a central repository for deal details.
Many investment banks also utilize technology to automatize their processes for searching, making the process of finding leads much easier and more efficient. This lets them focus their efforts on managing and building relationships with intermediaries, while also enhancing their ability to determine, qualify and connect with the best investment opportunities at the correct time.
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