Deal Origination Investment Banking
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 funding or exit). It’s not just a crucial component of a bank’s success, but has become a critical necessity for all businesses seeking growth. 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.
Traditionally, firms have relied heavily on inbound deal flow that they sourced from their connections with intermediaries and owners. But, this isn’t an effective method to increase the quantity and quality of deal opportunities. It can be time-consuming and difficult to establish precise goals and forecasts when the amount of lead sources fluctuates.
Many investment bankers are focusing on outbound deal sourcing. This method involves looking for specific types of deals in areas where the investment banker has experience and has a network of contacts. Increasingly, this is done through online platforms, like Axial which provides an online repository of deal information.
Many investment banks also utilize technology to streamline the process of searching, making the process of sourcing leads more efficient and efficient. This lets them focus their efforts on establishing and managing relationships with intermediaries, while also improving their abilities to identify, qualify, and connect to the best investment opportunities at the correct time.
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