There are a number of sources for deal flow ranging from (1) building your own target list using a number of database sources, (2) building relationships with intermediaries financial sponsors, and private equity firms and/or (3) outsourcing to a vendor partner to build proprietary deal flow.
Pre 2020, building proprietary deal flow was primarily a labor intensive manual research process. However, with advanced search and marketplace technologies emerging there are now a number of firms leveraging these emerging technologies to search and source more efficiently and effectively.
Since 2020, eight (8) firms have been funded with more than $121m deployed (more than $300m deployed to the top 25 B2B database providers since 2010).
With the increase in capital “dry powder” readily available and the changing ownership demographics and psychographics, the long-term forecast is for an increase in deal volumes.
Given the increasing competitive deal environment; it’s become even more important to develop proprietary deal flow. In 2023 the competition for the best deals will be more intense. As such, firms want first dibs on prospective sellers—often ahead of a formal auction or investment bank hiring will need to develop proprietary deal flow.
Capitalizing on 2023 deals means leveraging these advanced search technologies to identify these deal opportunities before others and partnering with seasoned industry executives to build a pipeline of proprietary deal opportunities.
As a number of entrepreneurs in 2023 face uncertainty and decide liquidity is a better option than doubling down on their existing business; buyers will have a number of available deal options that were not prevalent in recent years.
M&A CorpDev Buyside Deal Sourcing Origination Sources List
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