Investment banking, also known as Deal Origination is the primary source of revenue for the majority of investment firms. As such, a firm’s success is contingent on their ability to keep an ongoing pipeline of solid investment opportunities.
In the past, firms began their investment and acquisition processes by establishing relationships with businesses and individuals in their local markets. They did this through personal connections, Rolodexes, golf games lunch meetings, and even attending industry conferences in order to find business owners who might be interested in selling. A company’s M&A process www.digitaldataroom.org/what-is-operating-synergy/ today starts much earlier and has a global focus. This is due to the advancements in technology data analysis, data analysis, and a specially-designed digital tools.
M&A firm executives and their team’s primary task is to identify companies that are likely to be attractive to sell on the market and then pitch them to business owners. If the owner decides to accept the offer and the investment banker gets a mandate to advise on the deal, and earn commissions if they’re successful in closing the deal.
Investment banks can handle their deal source internally or outsource the function to intermediaries who are experts in a particular market or industry. They look for opportunities, initiate initial communication with business owners, and accelerate the process of completing transactions by managing paperwork and supplying market information. Investment banks cannot search through and filter through the numerous opportunities and are forced to rely on intermediaries, who may not have accurate and up to date business information.