Deal origination and investment banking is sourcing deals on the buy-side (working with private equity firms to find companies to invest in or acquire) and on the sell-side (working with companies who want to raise funds or even exit). It’s not just a crucial element of successful investment banks but is now a necessity for all businesses looking to grow. This article will examine the top dos-and-don’ts for effective deal origination and also some practical techniques that new-school companies are using to improve their efficiency.
Traditionally, businesses have relied heavily on inbound deal flow sourced through their relationships with intermediaries and business owners. But, this isn’t a reliable way to scale the number and quality of deal opportunities. It can be time-consuming and difficult to make accurate goals and forecasts when the amount of lead sources is unpredictable.
Many investment banks are focused on sourcing outbound deals. This process involves searching for specific kinds of transactions in areas where they have experience and a network of contacts. The majority of the time, this is done via online platforms, like Axial which serves as an integrated repository for deal details.
Many investment banks also utilize technology to automate search processes, making finding leads much easier and more efficient. This lets them focus their efforts on establishing and managing their relationships with intermediaries while also improving their abilities to recognize, qualify and connect with the most suitable investment opportunities at the correct time.
