Deal origination investment bankers source deals both on the buy side, working with private equity firms to find companies seeking investment or acquisition, as well as on the sell-side (working with companies seeking funding or an exit). It’s not only a key component of investment banking that is successful, but is now an essential part of every business that want to expand. This article will explore the top dos-and-don’ts for effective deal origination and some practical techniques that new-school companies are using to improve their efficiency.

Traditionally, firms have relied heavily on deal flow that they sourced from their relationships with intermediaries and business owners. But, this isn’t an effective way of increasing the amount and quality of deal opportunities. It’s time-consuming and difficult to establish accurate goals and forecasts when the amount of lead sources fluctuates.

Many investment banks are now working on sourcing outbound deals. This involves looking for specific kinds of transactions in areas where they have expertise and a network of contacts. Increasingly, this is done via online platforms, like Axial which provides an online repository of deal details.

Additionally, many investment banks use technology to automate their processes for searching and make sourcing leads much easier and more efficient. This allows them to focus their efforts on managing and establishing their relationships with intermediaries while also improving their abilities to determine, qualify and connect to the best investment opportunities at the correct time.

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