Deal origination in investment banking entails searching for deals on both sides (working with private equity firms to identify companies to invest in or buy) and on the sell-side (working with companies seeking to raise funds or sell). It’s more than just a critical component of investment banking that is successful however, it’s now an essential part of every business looking to expand. This article will discuss the most important dos and don’ts for successful deal origination and also some effective methods that the new generation of firms are employing to boost their efficiency.
In the past, firms relied heavily on deal flow created through their relationships and interactions with business owners and intermediaries. However, this is not a reliable way to scale the number and quality of deal opportunities. It is time-consuming and challenging to make accurate goals and forecasts if the number of lead sources is not known.
Many investment banks are focused on sourcing outbound deals. This method involves looking for specific types of deals in areas where the investment banker has experience and has a network of contacts. This is now increasingly done via online platforms board portals such as Axial that offer an online database of deal details.
Additionally to this, many investment banks employ technology to automatize their processes for searching and make the process of sourcing leads much simpler and more efficient. This allows them to concentrate on establishing and managing their connections with intermediaries, while also improving their ability to find and qualify the right investment opportunities at the right time.
