Comparing Corporate Development Origination Strategies

May 8, 2018

Most corporate buyers looking to acquire companies source their acquisition targets using a strategy that broadly fits into one of three categories.

While no single strategy is necessarily ‘the best’, the pros and cons of each should be considered prior to investing heavily in your company’s acquisition strategy.

1. The Internally managed origination effort

This category describes companies with internal corporate development staff who do not rely on outside resources.  These teams are often relatively small compared to the overall size of the company they serve.  In fact, it is not uncommon to see corporate development “teams” of just one person at companies as large as 1BD in annual sales.

Pros of this Strategy

Cons

2. Buy-side firms

While many private equity buyers rely in part on buy-side firms, much fewer corporate buyers have adopted the same strategy.  Some corporate buyers will retain a buy-side firm to work in conjunction with an internal corporate development hire.

Pros of this Strategy

Cons

3. CAPTARGET origination

Our sourcing services are considered a ‘best of both worlds’ approach.  We combine the best elements of (1) internal sourcing and (2) buy-side supported search efforts.

Rather than representing ourselves as a third party like a buy-side firm, we act as an extension of client’s corporate development arm.  This means we source both direct and indirect opportunities for you.  This is all managed by CAPTARGET, including the prospecting, outreach and vetting of opportunities.

Pros of this Strategy

Cons

Choose the right deal origination service level for your firm here.