Investment banks and business brokers represent their client companies in their selling process. Finding the companies that are willing to sell can be challenging. There are some common methods investment banks use to find businesses to sell. 

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Whether you’re an investment bank or business broker and looking for new clients, this guide is for you. 

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Different methods to find businesses to sell

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Market research

Continuous market research reveals industries with market changes, disruptions and trends providing interesting growth opportunities. Competitor analysis of previous sell-side clients can provide information on companies from similar industries, which could be ready to sell. Articles, press releases, and financial reports, can be used to provide additional information on companies that might be open to selling or partnering with investors. The accumulated knowledge of a particular industry allows identifying potential clients more dynamically. 

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Events and webinars

Industry-specific events provide an opportunity to establish connections and demonstrate expertise. Events can facilitate face-to-face interactions and help lay the groundwork for future conversations. Inven’s contact data can be used to send out event invitations. 

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Networking 

Networking is a good strategy to find potential clients. Talking with brokers, IBs, other PE and VC firms gives access to their networks. They meet many companies during their market research and outreach efforts. Sometimes these firms can refer you to potential clients.

Going through a list of companies with Private Equity backing can help you see which investors have contacts to the industry you are interested in. Inven helps you identify lists of brokers, IBs, or PEs that have a focus on a specific industry.

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Referrals

Having a good reputation with clients helps to earn referrals, as reputation travels in the discussions between owners and decision-makers. A well done deal brings a large share of IBs’ new sell-side clients. 

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Using Inven’s AI to find businesses to sell

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Inven is a deal sourcing platform which makes analysts’ work much more convenient. It gives investment banks access to artificial intelligence- and Natural Language Processing (NLP) based search tool, which enables them to find businesses to sell with greater speed and accuracy. The tool is capable of running a search through millions of data points from company websites to news and business registries and giving results of companies with favorable features, based on the analyst’s selected filtering. 

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How can Inven be used for this purpose in practice? Inven’s search can be used to find the companies with the most relevant features. Its filters include ownership structure, founded year, geographical location, and NLP keyword search. Keywords can be given different weights to better target the search or exclude results. This enables finding companies with owners in a certain range, from specific niches, without the need for limiting industry categorizations. 

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How to use Inven for sell-side deal sourcing:

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  • Search and export companies that were founded in the 1980’s or 1990’s, for example. From Inven you get access to companies with 40 years in the business that can be interested in selling in the near future.
  • Search companies from specific geographic locations with owners nearing retirement age. With Inven you can identify owners that are soon retiring and export them with contact data included.
  • Inven helps find clients from similar industries as your previous deal. Use a previous successful deal as an example company for the AI search. It will scan data sources and find companies with similar features, so you can find new clients from the specific industry.
  • Build a personalized list of companies that match your search criteria best. Export this list from Inven’s platform for bulk contacting purposes.

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Outreach strategies: How to contact businesses?

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After having the list of potential clients, there are various outreach strategies investment banks can use to introduce themselves and discuss their services with business owners. 

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Cold calling

Cold calling is a traditional and tried-and-true method for proactive outreach. Cold calling and outreach involve identifying businesses that align with the investment bank's criteria and initiating contact directly by phone. A well-prepared cold call can create an immediate and personal connection, allowing for direct communication and immediate feedback. Cold calling can also rely on the IB’s brand and reputation.

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Mail

A traditional approach involves sending well-crafted marketing materials and offers through physical mail. A well-designed mailer can capture attention and leave a lasting impression, which can support other contacting strategies at a later time.

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Cold email

There are software like Hunter and Apollo, which offer sales funnel management and cold emails. The best software streamlines tasks such as adding and removing prospects from campaigns, scheduling follow-up emails, and integrating multichannel approaches like cold calling. It also provides flexibility in sending according to schedules or time zones, and enhances email deliverability for better inbox placement. Crafting personalized and dynamic emails is essential for effective outreach. Use cold email platforms to send emails to a list of companies that have been derived from Inven’s tool, for example. 

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Personalized email

Sending personalized emails can be a more efficient strategy than cold emails, and the power of personalization cannot be overstated. Sending tailored emails increases the likelihood of a positive response and yields a higher engagement rate. Inven has verified contact data to enable an easy starting point for personalized email outreach. 

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LinkedIn messages

LinkedIn Sales Navigator can be used to reach out to company owners, targeted by their profiles and industries. Sales Navigator is a channel for connecting and starting a discussion via  personalized messages. It may not be the most efficient channel, but a tool for the first point of contact. Inven’s platform also provides convenient access to owners’ Linkedin profiles.

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Client events and networking

Hosting webinars or workshops on topics related to M&As can offer business owners a low effort way to get to know the investment bank’s services. Leveraging existing connections and organizing client evenings can lead to discussions with other potential clients. Well planned events build trust and credibility that can help initiate conversations on a positive note.

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Conclusion: Build client acquisition strategy accelerated with AI tools

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The most efficient client acquisition process is often built by combining the different methods. 

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Inven’s tool not only accelerates the search but also provides a resource for seller contacting. Inven’s Natural Language Processing-based search finds businesses based on customizable filters. The practical features of Inven include its ability to identify potential clients from niche industries, founded in specific year, and with owners approaching retirement. 

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Industry events, webinars, and networking have a role in establishing connections and showcasing expertise to potential clients. Referrals and reputation have vital roles in expanding client networks, and successful deals serving as proof of expertise. Continuous market research and access to a good company data platform are valuable in sell-side client search.

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The outreach approaches need to be tailored based on the IB’s strategy, industry focus, and expertise. Outreach strategies for connecting with potential clients include cold calling, personalized and cold email campaigns, LinkedIn messaging, and well-designed events. Engaging potential sellers therefore requires a mix of good tools and personalized engagement strategies.

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