Investment banking, or A Deal Origination is the primary source of revenue for most investment firms. Therefore, a company’s success is contingent upon their ability to maintain a steady flow of good investment opportunities.
In the past, companies started their acquisition and investment processes by developing connections with people and companies in their local markets. They did this via personal connections, Rolodexes, golf games luncheons and even attending industry events to identify business owners that might be interested in selling. Today, a business’s successful M&A process begins earlier and has a far more global focus, due to technological advancements such as data analytics, data analytics, and specific digital tools.
M&A firm the executives and their team’s main task is to find companies that might be attractive for a sale in the market and then pitch them to business owners. Investment bankers are given an opportunity to pitch their clients if the business owner accepts the offer and they earn a commission when they close the deal.
Investment banks can manage their deal source internally or outsource the function to intermediaries who are experts in a particular market or industry. They look for opportunities, initiate first communication with business owners, and can accelerate the process of completing transactions by handling paperwork and providing market information. While they are a useful tool, it can be time-consuming for investment banks to search and filter through countless opportunities and rely on intermediaries who might not always have accurate, up-to-date business information.