Deal origination investment banking involves finding 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 who want to raise funding or exit). It’s not data room just a vital element of a successful investment banking, but is now an essential requirement for all businesses looking to expand. This article will examine the top dos-and-don’ts for effective deal origination and some practical techniques that new-school companies are using to improve their efficiency.
Traditionally, firms have relied heavily on deal flow that they sourced from their connections with intermediaries and owners. However, this is not an effective method to increase the amount and quality of deal opportunities. It can be time-consuming and difficult to make accurate goals and forecasts if the number of lead sources is not known.
Many investment bankers are looking at outbound deal sourcing. This involves looking for specific types of transactions in areas where they have expertise and a large network of contacts. It is now increasingly conducted through online platforms, such as Axial which acts as an online repository of deal details.
In addition the majority of investment banks utilize technology to automatize their processes for searching and make the process of sourcing leads much simpler and more efficient. This lets them concentrate on building and managing their relationships with intermediaries while increasing their ability to recognize the right opportunities, qualify them and connect with the most suitable investment opportunities at the right time.