Deal sourcing or deal origination is a term used by finance professionals such as private equity investors and investment bankers to describe the process by which firms identify investment opportunities. The term can apply to venture capital or private equity. Ensuring that a larger volume of deals are sourced is imperative to keeping up a viable deal flow.
Thus, most venture capitalists, private equity investors, and investment bankers use various methods and origination strategies to source deals. While some firms reach out to teams of specialists to help with the deal sourcing process, others may use in-house resources. Investment banks usually provide deals to both the buy-side and the sell-side. Both buy-side and sell-side opportunities are sourced.
Deal origination largely depended on a broad network of contacts and a good reputation. Having an industry-specific knowledge and an idea of similar deals taking place in the market was considered an added advantage with respect to placing a bid.
Online deal sourcing
Traditional methods of deal origination are fast giving way to online deal sourcing platforms for buy-side and sell-side opportunities. Several financial technology companies around the world provide services to users to enable them to go beyond their network of contacts and source deals on the basis of a variety of criteria. In addition, online deal sourcing is considered vital in M&A transactions. There are various online deal sourcing platforms available such as Navatar, Dealsuite, Brookz, BankerBay, and Dealnexus.
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- ^“PE’s New Virtual Reality: Online Deal Sourcing Platforms – Middle Market Growth”. Middle Market Growth. 2015-10-01. Retrieved 2017-06-27.
- ^“The Rise of Online M&A Deal Sourcing – Wall Street & Technology”. Wall Street & Technology. Retrieved 2017-06-27.
- ^“Why Your M&A Advisor Should Use Online Deal Sourcing”. Divestopedia.com. Retrieved 2017-06-27.
- ^“Deal Market | Private Equity Deal Sourcing”. Navatar. Retrieved 2017-10-30.
- ^“Dealsuite login”. www.dealsuite.com. Retrieved 2017-11-20.
- ^“Brookz login”. www.brookz.nl. Retrieved 2018-10-09.
- ^“BankerBay : World’s most powerful deal origination platform”. www.bankerbay.com. Archived from the original on 2017-10-23. Retrieved 2017-06-27.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.