How to Generate Predictable, Repeatable and Scalable Deal Flow
In this episode of Deal Sourcery, Matt and Dan explore one of the biggest challenges faced by private equity firms: creating a predictable, repeatable, and scalable deal sourcing strategy. Together, they dive deep into the cyclical nature of deal flow and discuss actionable solutions for firms to establish more consistent deal pipelines. The conversation emphasizes the role of business development in driving predictable deal sourcing, the importance of setting measurable targets, and how firms can hold their teams accountable for performance.
Matt and Dan also cover the importance of aligning sourcing efforts with firm-wide goals and how to measure the right metrics—focusing on outputs over inputs. They offer practical advice on managing deal pipelines with granular stages to improve capital deployment, and discuss how stronger relationships with investment bankers can lead to better deal coverage and deal flow success. Tune in for this in-depth look at business development strategies, goal-setting, and accountability, and learn how private equity firms can elevate their deal sourcing performance to achieve long-term success.
Episode Highlights:
00:00 Intro
00:53 Challenges in Consistent Deal Sourcing for Private Equity
02:43 Importance of Dedicated Business Development Roles
03:19 Setting and Measuring Goals in Private Equity Firms
05:23 Linking Goals and Accountability in Deal Sourcing
07:43 Defining Key Metrics
10:52 Managing Top Prospects Through the Funnel
13:18 Measuring Quality Over Quantity in Outreach
14:38 Outputs That Drive Sourcing Performance
16:02 Determining Outputs Based on Investment Strategy
18:46 Focusing on Volume and Velocity for Add-ons
20:28 Effective Banker Coverage for Deal Sourcing
22:47 Benchmarking Deal Visibility with Industry Data
23:39 Setting Accountability in Sourcing Teams
25:07 Evolution of Private Equity Banker Relations
26:55 Future of Investment Banking with Tech Integration
30:54 Goal Setting and Accountability in Sourcing Teams
35:40 Setting Individual vs Team Goals for Sourcing
39:28 Tailoring Goals to Seniority and Experience
40:34 Keeping Teams Accountable for Sourcing Goals
49:44 Avoiding Meeting Pitfalls in Sourcing
51:25 Shifting Meeting Focus for Effective Accountability
53:23 Encouraging Best Practice Sharing and Problem Solving
53:52 Using Leadership Influence to Support Junior Team Members
Key Takeaways:
"Private equity firms struggle with unpredictable deal flow. They want consistent, repeatable sourcing."
"Set targets and measure against them. Accountability is key for predictable deal flow."
"Most firms don't apply sales best practices internally. It's time to hold sourcing accountable."
"Focus on outputs, not just inputs. Measure results, not just activities."
"Pipeline stages need granularity. More stages mean better tracking and accountability."
"Align firm and sourcing goals. Measure what matters to your strategy."
"Banker relationships are crucial. They now choose buyers, not the other way around."
"Meetings should drive accountability, course correction, and support. Not just readouts."
"Annual goal setting, quarterly corrections, monthly updates - keep progress visible."
"Use meetings for problem-solving, not just reporting. Focus on moving top prospects."
Links:
Dan Herr: https://www.linkedin.com/in/danielherr/
Matt Rooney: https://www.linkedin.com/in/matt-rooney-coastalpartners/
