Deal origination for investment banking is a crucial process that assists private venture capital and equity firms identify, connect and close deals. This process is also referred to as deal-sourcing, and is crucial for these companies to maintain an active pipeline of deals. It can be done using traditional methods or via online platforms.
The most popular method of finding investment opportunities involve networking with both industry specialists and entrepreneurs, who can provide unreleased information about a company owner’s plans to sell their business in the future. Additionally it is crucial for companies that invest to stay on top of trends in the industry and changes so they are aware of what their competitors are doing in the market.
Many modern investment banks use technologies to speed up the process of sourcing deals, including advanced data analytics, purpose-built digital tools, and artificial intelligence. This helps teams better understand their market and streamline business processes and transform data into private advantages. Private company intelligence platforms and data services are an essential to this, as they enable professionals to identify and research potential investment opportunities using authentic, relevant business data.
Some investment banks have their own deal sourcing staff in-house, comprised of finance professionals, while others have outsourced this task to specialist contractors. In both cases, these team members operate on a fee for service basis, meaning they are paid commissions every time they close an agreement on behalf of their firm.