Accelerating deal flow typically involves implementing strategies and tactics that help to increase the number and quality of business opportunities, partnerships, or investments you encounter. 

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Deal flow describes the rate at which venture capitalists, private equity investors, and investment bankers receive business proposals and investment opportunities.

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In this article we present ways to accelerate deal flow:

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  • Do it internally: Cold calls, referrals, and reputation building
  • Use deal origination companies
  • Accelerate deal flow with AI based platforms: Inven
  • Invest time to market analysis
  • Increase online presence

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Do it internally: Cold calls, referrals, and building reputation


Increasing deal flow can be done with an internal team, and it’s a numbers game. An internal deal sourcing strategy includes proactively seeking target companies through LinkedIn, email and cold calls, to increase the amount of meetings. Increasing the amount of resources to emails, calls and meetings will yield results if the volume is large enough. 

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A part of this strategy is to keep cultivating relationships with the industry network. The team will build relationships with company owners and set up meetings to discuss their ideas about selling in the future. Satisfied clients can become valuable sources of referrals, and maintaining good connections with existing contacts makes sense. Reaching to brokers to get a sense of potential companies is an opportunity, although they are in connection with multiple other potential PE and corporate buyers at the same time.

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Partnering with accelerators, incubators, or venture capital firms to gain exposure to a broader range of deals can go off well as a part of the broader deal sourcing strategy. This can give access to potential high-growth startups directly within the startup ecosystem and tips from founders and entrepreneurs themselves.

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The ideal goal is to reach a position as a trusted and knowledgeable leader in the IB/PE industry to get access to proprietary deals. Proprietary deal flow results from the M&A professional’s established relationships, expertise, or reputation within their industry or market. With a great track record, IBs and PEs can begin discussions with owners that do not want to make the opportunity available to a large group of potential investors. 

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Demonstrating deep industry knowledge and expertise can position the firm as a trusted advisor. This reputation can also attract companies seeking guidance for various financial transactions.

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Establishing a trustworthy reputation takes time. Reaching that position requires effort in building relationships, cultivating a brand reputation, and previous successful acquisitions. 

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Use deal origination companies

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Another strategy is to rely on external deal origination services to increase deal flow. 

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Companies like TruSight, Genz & Associates, Harvey & Company, Outflow Agency, and Captarget LLC can provide their support generating pre-checked high-quality prospects. There are number of great deal origination companies in the market.

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Deal origination companies are given their customers’ investment criteria, and they use their industry expertise and existing networks to identify the targets with the most potential. Many are specialized in specific industries, such as healthcare or technology, or have industry-focused teams with in-depth knowledge within that area. 

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Deal origination companies can act as an extension to the investment team of private equity funds, investment banks and corporations. They can also conduct market research, trend forecasting and industry analysis to determine where undersaturated markets are. 

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Their services typically include support with outreach. Deal origination companies can also do initial assessment and screening of the targets, evaluating financial performance, growth prospects, or competitive landscape. 

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Accelerate deal flow with AI based platforms: Inven

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One strategy to increase the efficiency of deal origination is to use advanced AI software. They can scan a vast amount of websites, news, social media, registries, and databases in a matter of seconds and find the most prospective deals.

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AI based tools have many productivity benefits to investors. For example, Inven’s software examines millions of data points to compile a list of potential targets. Going through the same amount of information would take analysts hundreds of hours of work time. 

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NLP technologies are able to find companies beyond the traditional industry codes, based on the companies’ actual core activities. They give analysts the capability to generate more accurate deal flow from niche markets.

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The platforms also allow for analysts to create personalized searches. The software can find companies from niche industries, with headquarters in Boston, or with owners that are likely to retire, for example. 

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These deal origination tools can also give access to contact data. Inven has verified CEO, Owner, Founder, and and other key individual contacts all combined in the same place. 

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Invest time to market analysis

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Adding resources to market and trend analysis activities can increasingly help to see market changes and exploit opportunities that come within. Staying on top of industry developments support identification of emerging niches, which can turn to profitable deals over time. 

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Industry consolidation, shifts in consumer preferences, or technological advancements can encourage owners ready to sell. Changes in financial performance such as shrinking margins or increasing debt, can be signals that owners were not prepared for changes in the markets. Companies facing market disruption might consider selling to larger players or competitors. 

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Outliers in certain industries can mean that private equity could support their future development. Furthermore, changes in ownership, leadership, or board composition can indicate a shift in the company's strategic direction. 

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Analysis of industry dynamics, regulatory changes, and geopolitical factors can reveal external pressures that might influence a potential sale. Sometimes also analyzing competitors' strategies can gain insights into which areas they are focused at the moment and where their approach is sifting.

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Increase online presence

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Good online presence and highlighted expertise can also increase visibility among the target companies. Investing in an informative and professional website with consistent updates is necessary. 

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In some cases, content creation through blogs, articles, and videos in relevant industry news channels and platforms can establish authority, turning into potential deals later on. Earned reputation in the form of press releases showcasing previous similar deals can support organic discussions with industry players and deal generation.

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Conclusion 

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Deal flow acceleration requires a combination of strategies tailored to your industry and goals. All of the approaches have their distinct advantages.

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The internal approach demands consistent effort driven by cold calls, referrals, and reputation building. Good relationships create a position where access to proprietary deal flow is more likely. External deal origination companies bring industry insights, networks, and processes to identify deals aligned with investment criteria. 

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Powerful AI-based platforms, like Inven, considerably grow efficiency and accuracy of deal sourcing. They use cutting-edge NLP technology to sift through vast data sources and identify potential targets that might otherwise go unnoticed. They empower private equity investors to find the right companies quickly and accurately to enhance their success.

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