A Deal Origination investment banking is a primary source of revenue for most investment firms. The success of an investment firm is contingent on its ability to maintain a steady flow of good investment opportunities.
In the past, companies began their investment and acquisition processes by developing relationships with corporations and individuals in their local markets. They did this by personal connections, Rolodexes, golf games, lunch meetings, and even attending industry conferences in order to find business owners that might be interested in selling. A company’s M&A process is now much earlier and is geared towards global markets. This is due to the advances in technology, data analysis, and the development of a specific digital tool.
The primary job of M&A executives and their teams is to determine digital data room companies that are likely to be attractive to buyers and to present them to business owners. If the business owner decides to accept the offer and then the investment banker will be given the responsibility of advising on the deal, and earn an income if they are successful in closing the deal.
Investment banks can handle their deal sourcing internally or outsource the role to intermediaries that are experts in a particular market or industry. The intermediaries can scan for opportunities, communicate with business owners and help advance the transaction by coordinating paperwork and providing details about the market. While a valuable tool, it can be time-consuming for investment banks to constantly search and filter through endless opportunities and rely on intermediaries who might not always have accurate, up-to-date business information.