Deal Origination Investment Banking

Deal origination investment banking is the process through which private equity and venture capital firms find opportunities for investment. The objective of this method is to ensure that a large volume of deals are obtained within a timeframe to sustain a sustainable business. To accomplish this, the firm must have a broad network of contacts and a solid reputation in the investor community. This can be achieved by or gaining knowledge of deals open and bidding against similar companies, or by negotiating the deal themselves by leveraging their connections with the involved parties.

In the past, most deals were inbound. They were brought in by an acquaintance or a colleague who had alerted the company to a possible deal. But, many firms are now using outbound sourcing strategies to create more reliable and quantifiable investment banking deal flow. Outbound sourcing is about searching for opportunities that match the team’s investment philosophy knowledge, domain expertise, and objectives. If done correctly this strategy can provide an efficient source of high-quality investment opportunities at only a fraction of the cost and time involved in inbound sourcing.

It’s a constantly changing area, with new technologies that allow teams to accomplish more in the same. Take a look at how we used to call the movie theater to check the showtimes or drop a roll of film for development at the photo shop. In the same way, the method by the way that investment banks are sourcing and analyzing deals has evolved thanks to the development of new technology. Read on for some of the top dos and don’ts modern investment banks are following to increase efficiency and improve their sourcing efforts for outbound transactions.

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