PE BD / Deal Origination Best Practices
I would like to start a thread to discuss best practices in PE BD / Deal Origination.
Wondering what a typical Week / Month looks like for you fellow monkeys, along with the tech stacks that are used within you shops.
Hoping this can be a fruitful discussion.
Ah, the art of deal origination in private equity – a crucial piece of the PE puzzle! Based on the most helpful WSO content, here's a little insight into the life of those in PE BD (Business Development) / Deal Origination:
Typical Week/Month: The rhythm of a BD professional in PE can vary, but it often involves a mix of networking, researching potential targets, and nurturing relationships with intermediaries like investment banks and brokers. A typical week might include reviewing investment criteria to identify potential acquisition targets, attending industry events (virtually or in-person), and holding meetings with potential sellers or their representatives.
Tech Stacks: In the realm of technology, CRM (Customer Relationship Management) systems are the backbone of any BD effort. Tools like Salesforce, DealCloud, or proprietary platforms are commonly used to track interactions, manage deal flow, and maintain relationships. Additionally, databases such as PitchBook, CapIQ, or Axial might be used for market research and identifying potential deals.
Best Practices: As for best practices, it's all about staying organized and proactive. This means keeping meticulous records of interactions, being diligent in follow-ups, and always looking to expand one's network. It's also important to stay informed about industry trends and company news to identify opportunities early.
Remember, in the jungle of PE, it's not just about finding any deal; it's about finding the right deal that aligns with the fund's strategy and can generate the desired returns. So, sharpen those tools and get ready to swing from vine to vine in the deal jungle!
If you're looking to dive deeper into the world of PE BD and deal origination, the WSO forums are a treasure trove of discussions and insights from fellow professionals. Just remember, the best practices shared are as much about the soft skills – like relationship-building and communication – as they are about the hard skills and tech tools. Happy hunting!
Sources: Q&A: Lower Middle Market PE Associate -- Ask Me Anything, M&A consultant Q&A, RE / REPE - What is your typical day to day like?, Typical AM Summer Analyst Day at a BB?, Coverage bankers, how do you keep up with activity in your space? What resources do you use?
BD guy here (banker coverage). One of the biggest and most basic things IMO is getting the rest of the firm to buy in and log their notes/meetings/calls in the CRM.
Typical week is just an ongoing cycle of catchup calls, meetings, and reading CIMs. In a typical month, I usually travel anywhere from 1-3x. I hit the ACG circuit pretty hard and other one-off events and conferences. Happy to see another BD thread!
Thanks for the insightful reply!
Is any work spent on research and expanding your potential universe selection?
Bump on tech stacks
Bumping this. Got an offer at a UMM fund as BD Analyst (5 years post grad) and debating whether itll be worth a pay cut to break into PE (vs tech partnerships) with the goal of actually understanding how good businesses work and gaining conviction for a certain industry to end up with a better shot at in Sales / Biz Dev company down the line (not in it purely for comp)
My 2cents, if you end goal is to be an operator, you’re already on the right track. Don’t think a BD PE role is all that accretive to your long term vision.
Do you prefer the operator track or the originator track?
I source for a growth equity / buyout shop as part of my responsibilities.
This is the tech stack you want:
Grata
Pitchbook
Sourcescrub
Good dealmaking oriented CRM
May I ask who gets into such BD positions?
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