Deal origination in investment banking entails searching for deals on both sides (working with private equity firms to identify companies to invest in or acquire) and on the sell-side (working with companies looking to raise funds or even exit). It’s not just a vital part of successful investment banking but has become required for all businesses that want to expand. This article will discuss the top dos and don’ts of effective deal origination, as well as a few practical strategies that new-school firms are using to increase their efficiency.

Traditionally, businesses have relied heavily on inbound deal flow from their relations with intermediaries and business owners. This isn’t a reliable method of increasing the number of deals and their quality. It is time-consuming and difficult to establish accurate goals and forecasts when the amount of lead sources is unpredictable.

Many investment bankers are looking at outbound deal sourcing. This process 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, such as data room Axial, that provide a central repository for deal details.

Many investment banks also use technology to automate search procedures, making the process of finding leads much easier and more efficient. This allows them to concentrate their efforts on managing and developing their relationships with intermediaries while also improving their ability to determine, qualify and connect to the best investment opportunities at the right time.