Deal origination in investment banking is an essential process that assists private venture capital and equity firms find, connect and close deals. This process is also known as deal-sourcing and is vital for these companies to maintain an active pipeline of deals. It can be achieved through traditional or online methods.
The most popular methods for discovering investment opportunities is to connect with both industry experts and entrepreneurs, who may offer access to unreleased details about the owner of a business’s plans to sell their business in the future. Investment firms must also be aware for changes in the industry and trends to see what their competitors are doing.
Modern investment banks employ technology to speed up deal sourcing processes. They use advanced data analysis, digital tools that are specifically designed, and artificial intelligence. This helps teams better understand their markets, streamline business processes, and turn data into proprietary advantages. Private company intelligence platforms along with data services and business information are key to this. They enable professionals to discover investment opportunities using relevant and verified business information.
Some investment banks have an in-house deal sourcing team of finance professionals, whereas others have outsourced this function to specialist contractors. In both instances, the team members operate on a fee for service basis, meaning they are paid a commission every time they close the deal on behalf their company.
