Evolving Deal Origination: Beyond Leads and Fees

As one of the first movers in fee for service based deal origination, we have seen the market and its players evolve rapidly over the last decade and a half.  

Now more than ever, new service providers that enter our market take one of two approaches.

1. Sell Leads.
2. Generate Fees (similar to that of a conventional buy-side M&A shop.)

These origination models have very real flaws. These flaws should be understood before you make any decisions about who your firm may work with. 

Problem #1 - Selling Leads. 

This approach penalizes firms with tight mandates, or small fund sizes. 

There are only so many companies your firm can possibly acquire, depending on your mandate.  

This means for service providers who look to monetize acquisition opportunities on a per lead basis, any potential client with a modest target pool is worth much less to the service provider. 

This is why most of these originators focus on commoditized work for larger funds who work for volume.  

While paying for good performance can make sense, “leads” leave the originator and the client focused only on short term results. It also creates a lot of noise in the process. 

We believe more “leads” is not necessarily a better solution. 

Better is better!

Problem #2 - Generating Fees.

Not all firms are treated equally when fee share is on the line.

Service providers who participate in a finder's fee or similar will give preference to the client that gives them the highest fee split and has the highest certainty of close. 

This means the client is at the mercy of the originator to pick and choose what they believe is their best interest for the client to see.  

Again, this leads to a meaningful misalignment between all parties. 

We believe every client should be treated equally and own their leadflow no matter what! We try to solve the challenge in a different way, which we call the partnership difference.  

Our Track Record of Building Pipelines

Rather than looking to sell leads to funds, we look to partner with private equity firms to help them build healthier pipelines (which result in us collectively generating more lead flow!). 

This means:

• As part of our normal scope of work we provide consultative best practice and coaching feedback to allow our private equity clients to not just catch a mouse, but to build a better mousetrap.
• Rather than working within an interface alone, our clients work one on one with a dedicated and experienced account manager (that's me!) who is available to collaborate, provide guidance, creatively solve problems and more. 
• Over the long term, we have the flexibility to run multiple engagements concurrently, modify strategy or criteria in near real time or even help you manage only the pipeline we previously built on a reduced cost basis. 
• Since we are paid a flat monthly fee by all clients, with no upside incentive we can guarantee that each client owns and controls 100% of the opportunities derived from our efforts. No one client gets preference, regardless of the mandate or fund size.  
• Even after our engagements conclude, our clients have benefited from our partnership and support in many ways, including; increased long-term organic inbound lead flow, better outreach conversion rates, improved brand presence and brand alignment.  

In the end, we want to play a small part in helping make our clients firms better through the lens of origination.  

As we like to say, it's all about deal flow vitamins, not deal flow bandaids.

Read more about our services here.

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