Deal Origination Investment Banking
Deal origination investment bankers source deals on both the buy-side and working with private equity firms to find companies seeking purchase or investment, and on the sell side (working with companies in need of financing or an exit). It’s not only a fundamental component of successful investment banks, but is now a must for any business looking to grow. This article will review the most important dos and don’ts for successful deal origination as well as some effective methods that the new generation of businesses are using to improve their efficiency.
Traditionally, companies have relied heavily on deal flow that they sourced from their relations with intermediaries and business owners. This isn’t an efficient method of increasing the number of deals or the quality. It is extremely time-consuming and it’s difficult to make accurate forecasts and goals when the quantity of lead sources available can be unpredictable.
Many investment bankers are focussing on outbound dealsourcing. This process involves searching for specific types of transactions within areas in which they have expertise and a strong network of contacts. This is now increasingly done via online platforms like Axial which provides an online repository of deal details.
Additionally the majority of investment banks utilize technology to automatize their search procedures and make finding leads much easier and more efficient. This allows them to concentrate their efforts on managing and developing their relationships with intermediaries while also enhancing their ability to determine, qualify and connect with the best investment opportunities at the correct time.