Deal Origination Investment Banking
Deal origination is the process of seeking deals on the buy-side (working with private equity firms to locate companies to invest in or acquire) and on the sell-side (working with companies who want to raise funding or exit). It’s not only a key element of a successful investment banking and is now an essential part of every business seeking to expand. This article will discuss the top dos-and-don’ts for effective deal creation and will also provide some practical techniques that new-school firms are employing to boost their efficiency.
In the past, companies relied heavily on deal flow generated through their relationships and interactions with business owners and intermediaries. This is not an effective method of increasing the number of deals or the quality. It’s extremely time-consuming, and it’s challenging to create accurate forecasts and goals when the quantity of lead sources that could be used can be unpredictably.
Many investment banks are working on sourcing outbound deals. This method involves looking for specific types in areas where the investment banker has expertise and has a network of contacts. Increasingly, this is done via online platforms, like Axial, that provide an integrated repository for deal information.
Many investment banks also employ technology to automate search processes, making the process of sourcing leads simpler and more efficient. This allows them to focus their efforts on managing and establishing relationships with intermediaries, while also improving their abilities to identify, qualify, and connect with the most lucrative investment opportunities at the right time.