Deal origination and investment bankers are able to source deals on both the buy-side and with private equity firms in order to find companies that are suitable for investment or acquisition, as well as on the sell-side (working with companies seeking funding or an exit). It’s more than just a critical component of successful investment banking, but is now required for all businesses that want to expand. This article will review the top dos-and-don’ts for effective deal-making as well as some of the most effective strategies that new-school companies are using to improve their efficiency.
In the past time, firms relied heavily on deal flow that was generated through their relationships and connections with business owners and intermediaries. This isn’t the most efficient way to increase the number of and quality of deals. It’s time-consuming and difficult to establish precise goals and forecasts when the quantity of lead sources is not known.
Many investment banks are now focusing their efforts on sourcing outbound deals. This process involves looking for specific types of deals in areas where the investment banker has expertise and has a network of contacts. The majority of the time, this is done via online platforms, like Axial which provides an online repository of 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 allows them to focus their efforts on managing and building relationships with intermediaries, while also improving their ability to determine, qualify and connect with the most lucrative investment opportunities at the right time.
