Deal origination is the process of sourcing deals on the buy-side (working with private equity firms to locate companies to invest in or buy) and on the sell-side (working with companies looking to raise funds or exit). It’s not only a key element of a successful investment banking, but is now an essential part of every business that want to expand. This article will discuss the key dos and don’ts of a successful deal-making process, and also some useful strategies that companies in the new school are following to improve their efficiency.
In the past time, firms relied heavily on deal flow that was produced through their relationships and connections with intermediaries and business owners. This isn’t an efficient method to increase the quantity of deals and the quality. It can be time-consuming and difficult to make accurate goals and forecasts if the number of lead sources is unpredictable.
Many investment bankers are now focussing on outbound dealsourcing. This process involves looking for specific types of deals in areas where the investment banker has expertise Get the facts and has a network of contacts. This is increasingly done via online platforms such as Axial that offer an online database of deal details.
In addition to this, many investment banks employ technology to automatize their search processes and make the process of sourcing leads much simpler and more efficient. This allows them to concentrate their efforts on managing and building relationships with intermediaries, while also enhancing their ability to determine, qualify and connect with the most lucrative investment opportunities at the right time.