At the root of every investment bank's corporate strategy lies a simple pursuit- increase deal flow. Whether the bank is a powerhouse or a boutique firm, the aim of their deal flow is to bring more money and more deals through the door. But, with growing competition in the market, improving deal flow is easier said than done. Yet, if you're a boutique bank, there are several key ways in which you can differentiate your deal flow technologies.
Curious what actions you can take to improve boutique investment bank deal flow? Keep reading to learn more about key strategies from expanding your digital presence to utilizing M&A software.
There are three primary responsibilities for any Banker involved in Business Developments:
While managing the granular nuances embedded within these three tasks, how does one maximize output?
Many smaller banks make the mistake of throwing all their efforts and cash reserves into deal flow- yet neglect to put the time and resources necessary into building and promoting their brand. Simply put, if your banking services don't have a digital presence and can't be found online with a website, all your efforts are wasted.
In truth, the vast majority of CEOs will conduct internet research before they take any other actions. If they are unable to discover your boutique investment bank when they search on Google, they won't be contacting you. Instead, they'll just call the boutique banker that comes to the top of the search page.
To prevent potential deals from slipping through your fingers, you need to focus on your website's search engine optimization (SEO) and create a website that looks professional and successfully represents your boutique investment bank.
15-20 years ago, whoever had the biggest network was the best bank. Today, it is more about your tools than your existing network — you can find relationships you never had before. Boutiques that are not targeted with their lists and relationships may struggle to identify the best investor for their client.
These days, there are an increasing number of tasks that can be done more efficiently by AI. From combing through conference lists to more comprehensively achieving data integrity, technology can augment efforts across your process. Fortunately for boutique investment banks, there's Sourcescrub, an online deal sourcing platform that helps generate leads and increase deal flow by virtually connecting buy-side and sell-side interests on a global basis via private company firmographics and associated 'Sources' those companies appear on throughout the web .
Benefits of such a revolutionary technological platform include:
Although they aren't as powerful a source of deals as they used to be, tradeshows and conferences are still rich hunting grounds for potential deals. That said, they're a long-term deal flow strategy as opposed to a short-term solution. The goal isn't to walk out of an event with a deal on the books; rather, it's about meeting other industry professionals and potential leads and then building a relationship and rapport with them.
Per Investopedia, boutique advisory M&A firms have become increasingly popular, especially at tradeshows. They write:
Large banks are also frequently bound by political and regulatory bindings, which may enforce unwanted constraints on advisory businesses for conflicts of interest. M&A boutiques enjoy great flexibility in this regard. With independence from political and regulatory bindings, M&A advisory boutiques offer a perfect fit for specialist advisory services dedicated to specific sectors.
Naturally, how many and which in-person events you attend will depend on your boutique bank's specific niche, strategy, and specializations within their financial services. That said, just about any bank will derive benefits from attending such conferences.
Similarly, the days of deals primarily being conducted on the golf course are long gone. Despite that, there is something to be said about the importance of maintaining long-term relationships. Even if a deal doesn't work out, it's worth keeping up genial relations so that the next time around might be a better fit.
Also, businesses who enjoyed working with you may refer your banking institution to a friend or contact who might need your financial advice and services. However, if you only invest in others when there's money on the line, your relationships will likely yield insignificant dividends.
In today's financial landscape, deal flow is the name of the game. Fortunately for boutique investment banking groups, there are simple steps you can take to differentiate yourself from the larger banks.
By utilizing tools within Sourcescrub, building relationships, and improving your SEO efforts, you will ensure that your banking deal flow is unparalleled.
1. Business Insider. What the Growing Number of Boutique Investment Banks Means for Deal Sourcing. (2013).
2. Shobhit, S. Investopedia. M&A Advisory Business Boutiques: How The Small Shops Are Capturing Large M&A Deals.
3. DeCesare, B. Mergers and Inquisitions. Boutique Investment Banks vs. Middle-Market vs. Bulge-Bracket Banks.