Sell-side investment banks strategically guide companies through the selling process, identify and engage suitable buyers. Typical buyers include private equity groups, strategic buyers, and VCs. In this article, we introduce some of the best practices to find potential buyers.
Why is finding a buyer a challenge?
Finding the ideal buyer for a business can be a time-consuming process. Buyer‘s and seller’s objectives need to align, and buyers are motivated by a range of factors. Strategic buyers aim to benefit from the seller's products and capabilities, while competitors look to acquire market share. Financial buyers search for the next scalable company and capitalize on emerging technologies and trends. Identifying potential buyers who possess the necessary financial resources, industry expertise, and strategic fit can be a challenge.
Investment bank’s existing networks and relationships play a major role in the buyer search. Networks aren't always large enough to find an engaged buyer, which is why they are typically combined with a quality business intelligence platform.
Best practices to find potential buyers
Wondering how to accelerate the process of finding a buyer? There are a couple of strategies you can use. Employing AI can significantly streamline your efforts.
Existing connections and networks
Existing relationships with corporate executives, PE firms, VCs, and other potential buyers help to find potential acquirers. Referrals are also a strong strategy to find prospective buyers. IBs have extensive records of possible buyers encountered through previous deals, events, and connections. Agile CRM systems enable swiftly identification of potential list of buyers.
Targeted market research
Targeted research is aimed to identify corporations or PE firms that align with the seller's criteria and capabilities they have. IBs collect data on the motivations and strategies of different types of buyers and identify potential buyers who would benefit from synergies with the selling company. There are many data sources to use for in-depth market research and company information. Industry forums and M&A news sites are also used to explore the pool of potential buyers. Possible buyers can also be identified by looking at their recent deal activity. Financial news sites such as Bloomberg report current M&A news and motivators behind the acquisitions.
Using AI tools for building a buyers list
AI tools are a novel way to build buyers lists faster. These platforms are tailored for investment banks and PE firms, and they combine expansive filters with dynamic search capabilities. Deal sourcing platforms provide access to multiple data points on the buyer, including the key decision makers’ contacts. They enable reaching a wider pool of potential acquirers with less time spent on the market mapping process and more on connecting.
How to use AI to Build a Buyers List?
Would you like to find more prospective buyers with the help of AI? Inven ’s Investor Search is a platform for buyers list building. The tool makes it easy to find potential acquirers for sell-side mandates. M&A professionals only set their search parameters, and Inven’s AI will scan millions of data points from company websites, official government registers, news articles, blogs, social media and many other sources. The result is a list of all relevant buyers and their data points in one place.
Six ways to find potential buyers with Inven
The Investor Search has been specifically developed to support investment banks in building a buyers list. Here are six ways that Inven can support your task of selling a business:
- Finding buyers based on type and location
You can specify the type of investor you want to find: private equity firms, venture capital firms, or corporate buyers. Connect with investors based on their geographical location and past target’s locations. This helps you to target investors who have demonstrated a preference for your target market.
- Finding buyers that have invested in similar companies before
Inven helps to uncover investors with a history of backing companies in specific industries. Describe the kind of companies that the investor needs to have invested in, or use the company you are trying to sell as an example. Investor Search gives you a list of firms that have invested in similar companies before.
- Finding strategic buyers from the same industry
Inven’s platform helps to find strategic buyers that operate in the same industry as your company. Focus on corporations with a proven history of completing M&A deals similar in scale to the proposed transaction. Or use the Company Search to find more large corporations from the preferred industry to expand your potential pool of strategic buyers.
- Finding companies that have been acquired already
By using Inven’s company search, you can find companies backed by different investors. Search for companies related to the business you’re selling with for example PE owners. Once you have a list of companies, it is simple to research their websites for recent acquisition news.
- Finding family offices from specific industries
With Inven’s advanced company search you can find family owned PE firms. This enables you to find family offices that are focused in the seller’s industry.
- Finding generalist buyers
Use the tool to locate PE firms that are not industry focused, which means that they can be open for many different kinds of investment targets.
Are you looking for a tool to build a buyers list? Book a demo to see how to find potential buyers with Inven.
Finding the Right Buyers for Your Client
Investment bankers leverage industry knowledge, networks, and targeted outreach to identify and engage potential buyers. Ending up with a suitable buyer sometimes requires the help of dynamic data analysis tools.
Tools for building a buyers list have developed a lot in the last few years. AI platforms like Inven can significantly improve M&A professionals’ work quality and save a lot of valuable time. Merged with the IB’s comprehensive industry expertise, they ensure that a successful transaction is more likely to happen.
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