Deal origination and investment bankers are able to source deals on both the buy-side, working with private equity firms to find companies for acquisition or investment, and on the sell-side (working with companies seeking financing or an exit). It’s not only a fundamental element of successful investment banks, but is now a necessity for all businesses seeking growth. This article will explore the most important dos and don’ts of a successful deal origination along with some practical strategies that startups are following to improve their efficiencies.

Traditionally, companies have relied heavily on inbound deal flow that they sourced from their relations with intermediaries and business owners. However, this is not an effective way of increasing the quantity and quality of deal opportunities. It is time-consuming and challenging to establish accurate goals and forecasts when the number of lead sources is unpredictable.

Many investment banks are now working on sourcing outbound deals. This method involves looking for specific types in areas where the investment banker has knowledge and has a network of contacts. The majority of the time, this is done via online platforms, like Axial which acts as an integrated repository for deal details.

Many investment banks use technology to automatize the process of searching, making sourcing leads easier and more efficient. This allows them to concentrate their efforts on managing and developing relationships with intermediaries, as well as improving their abilities to find, qualify, and connect with the most suitable investment opportunities at the right time.

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