Deal origination investment banking involves sourcing deals on the buy-side (working with private equity firms in order to find companies to invest in or buy) and on the sell-side (working with companies who want to raise funds or exit). It’s not just a vital component of successful investment banks, but is now a crucial requirement for any business looking to grow. This article will discuss the most important dos and don’ts for successful deal origination and will also provide some strategies that young businesses are using to improve their efficiency.
In the past, companies relied heavily on deal flow that was produced through their relationships with business owners and intermediaries. However, this is not an effective way to increase the quantity and quality of deal opportunities. It is time-consuming and difficult to set accurate goals and forecasts when the amount of lead sources fluctuates.
Many investment banks are focusing their efforts on sourcing outbound deals. This involves searching for specific types of deals in areas where the investment banker is knowledgeable and has a network of contacts. This is often done through online platforms like Axial that provide an accessible database of deal information.
Additionally to this, many investment banks employ technology to automatize their search procedures and make sourcing leads much easier and more efficient. This allows them to concentrate their efforts on managing and establishing their relationships with intermediaries while also improving their ability to find, qualify, and connect with the best investment opportunities at the right time.
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