Wholesale vs. Retail Deal Origination

We often call ourselves a wholesale provider of deal origination…but what does that mean?

First things first, we are not a buy-side firm, nor do we consider ourselves a replacement for a buy-side firm.  We do a number of things they don’t do and vice versa.

Wholesale (CAPTARGET)

Wholesale deal origination providers like CAPTARGET have a few unique characteristics as follows:

  • We never charge success fees – we work on a simple flat monthly subscription basis.  This allows us to work with many firms with little or no conflicts.
  • We do not advocate for any transaction – we bring the horse to water (so to speak) but what happens next is up to our clients.  Since we have no upside in any transaction we simply look to find good opportunities as often as we can for further vetting by our clients.
  • We qualify, introduce and step away.  Unlike a buy-side firm, we do not do additional industry research, pre-diligence etc.  We are here to gauge interest and fit – that is about it.
  • We work on a short term commitment basis and aim to generate a high volume of near-term results.

Wholesale deal origination works well for firms that:

  • Prefer to not pay success fees.
  • Want to control the vetting process from an early stage.
  • Do not want to commit to long-term, high-cost buy-side retainers.
  • Small firms whose principals lead the vetting process.
  • Large firms that source many mandates at scale.

Retail (Buy-side M&A firms)

Retail deal origination providers are distinctly different in the following ways:

  • Charge success fees.
  • Range in price from success only to a combination of success fees and retainers.
  • Often advocate for a transaction.
  • Often provide additional pre-diligence, reporting or other industry reporting services.

Retail deal origination providers work well with firms that:

  • Need a soup to nuts solution and are willing to pay a premium for it.

While each private equity firm we come across is different, we find that most prefer and can benefit from our more wholesale solution. If your private equity firm is looking to tap into a well proven, domestic origination resource and fits the profile of a typical wholesale origination type user, we can help you generate more deal flow (both proprietary and non-proprietary) for less money on a per introduction basis than almost any other method or provider.

 

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