Investment banking, also known as Deal Origination, is the primary source of revenue for the majority of investment firms. Therefore, a company’s success depends on their ability to maintain an uninterrupted pipeline of reliable investment opportunities.
In the past, companies began their acquisition and investment processes by building relationships with businesses 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 who might be interested in selling. A company’s M&A process is now Reliable space for M&A deals much earlier, with a global focus. This is due to the advances in technology and data analysis, as well as a the development of a specific digital tool.
The main job of M&A executives and their teams is to discover companies that could be attractive to buyers and to offer them to business owners. If the business owner decides to take up the offer, then the investment banker gets the authority to provide advice on the deal, and earn a fee if they’re successful in closing it.
Investment banks can either manage a deal sourcing operation internally or outsource this task to intermediaries who specialize in a specific industry or market. They search for opportunities, start first communications with business owners, and facilitate the transaction process by processing paperwork and providing market information. While it is a valuable tool it can be time-consuming for investment banks to look through and filter opportunities and rely on intermediaries who might not always have accurate, up-to-date business information.