It seems like there are more ways than ever to source a deal – but building a strong intermediary represented deal pipeline should be kept simple.
Many PE professionals we talk to confidently state ‘We already talk to a lot of intermediaries.’. While this is often true, the phrase ‘a lot’ can be very subjective. Does your firm talk to dozens of firms? Hundreds? Thousands?. There are more than 5,000 middle market focused intermediaries in the market right now. Unless you are speaking with most of them fairly often, there is room to significantly expand your intermediary relationships.
Certainly, there are a number of platforms that help PE buyers reach more intermediaries, we have even worked with a few of the major ones. These platforms or matchmaking networks are functional to a point but have one big drawback – the double opt-in, or two-sided market problem. In order for you to connect with an intermediary, they need to be active on the platform. Even the best deal marketplaces only represent about 50% of the active dealmakers in the market, leaving significant opportunities unearthed.
Our non-proprietary origination service (which starts at $1000 per month) is a great way to solve both challenges stated above. By reaching out to nearly 5,000 middle market focused intermediaries, via email and/or phone, we can accelerate your efforts, play a bit more of the ‘numbers game’, and help your firm manage the new activity that comes from an accelerated effort. Rather than relying on fragmented platforms or tools, we keep things simple by managing all the direct outreach in a white-labeled capacity to ensure the information and relationships captured belong to your firm. Often times, the simple solution is the best – good deal origination doesn’t have to be about being on the bleeding edge, it just needs to be functional and consistent.
Whether we manage this process or your firm manages it internally, the fact remains, you should be speaking to many thousands of intermediaries consistently to maximize your deal flow and running warm email campaigns to a well-curated audience is the easiest, most cost-effective way to accomplish this. For details on how we manage sourcing deal flow from nearly 5,000 intermediaries, please feel free to contact us or visit our origination page here for more information.