Deal origination investment bankers source deals both on the buy-side as well as working with private equity firms in order to find companies that are suitable for acquisition or investment, and on the sell-side (working with companies in need of funding or an exit). It’s not just a crucial component of successful investment banking but has become an essential part of every business seeking to expand. This article will discuss the most important dos and don’ts for successful deal creation and will also provide some strategies that young companies are using to improve their efficiency.
Traditionally, firms have relied heavily on inbound deal flow sourced through their relationships with intermediaries as well as business owners. This isn’t the most efficient method of increasing the number of deals and their quality. It is time-consuming and difficult to set accurate goals and forecasts when the quantity of lead sources is unpredictable.
Many investment bankers are now focussing on outbound dealsourcing. This approach involves looking for specific types in areas where the investment banker is knowledgeable and has a network of contacts. Increasingly, this is done through http://www.digitaldataroom.org/what-is-deal-origination online platforms, such as Axial which serves as a central repository for deal information.
Many investment banks use technology to automate search procedures, making the process of the process of sourcing leads simpler and more efficient. This lets them focus their efforts on managing and building relationships with intermediaries, while also improving their abilities to find, qualify, and connect with the most suitable investment opportunities at the right time.