Build a Proprietary Deal Sourcing Advantage in 3 Stages

Sourcing & Origination
Private Equity
Last updated:
June 9, 2022

“That’s one small step for [a]man, one giant leap for mankind.”

Neil Armstrong uttered these now famous words as he set foot on the moon for the first time. Since then, NASA has continued to harness the latest advancements in science and technology to take many “small steps” that continuously push the boundaries of space exploration.

While you won’t see many investors soaring through our solar system (other than Jeff Bezos and Elon Musk, of course), dealmakers are leveraging data and technology to make progress in other ways. Today, closing more deals hinges on a firm’s ability to strategically differentiate itself by proactively identifying, systematically evaluating, and intelligently connecting with the right opportunities faster and earlier than competitors.

But just like space travel, creating this proprietary sourcing advantage must be done one “small step” at a time.

From People and Networks to Proprietary Advantage

Over the course of our experience working with dozens of leading dealmakers, SourceScrub has determined that every firm falls somewhere within the following 3 stages on its quest to achieve proprietary advantage:

Stage 0: People and Network

Deals come primarily inbound and are researched by interns or Analysts who manually search the web, scrub whatever data they find, and track deals using spreadsheets.

Stage 1: Technology-Assisted

A dedicated Business Development team vets both inbound and directly-sourced opportunities against basic thesis criteria using a variety of data services and standalone CRM platform.

Stage 2: Strategic Capabilities

Specialized data sources,integrated CRM, automation tools, and Sales and Data Analysts power a highly scalable, systematic, and predictable direct sourcing model.

Stage 3: Proprietary Advantage

Data scientists combine many data sources into custom datasets that live in a cloud data warehouse and are analyzed using BI tools, resulting in proprietary scoring algorithms, market modeling capabilities, and more.

Advancing from one stage to the next requires firms to take “small steps” toward leveraging data, technology,and people in increasingly integrated and sophisticated ways. Examples including hiring a dedicated IT manager to build out a robust technology stack, integrating your customer relationship management (CRM) platform with data services and sales acceleration solutions, and leveraging data science to create custom, curated datasets for holistic analysis.

Which Stage Are You?

Every dealmaker is unique. But following the data, technology, and people recommendations provided in this maturity model is sure to help your firm incrementally improve and take the necessary steps toward a more modern, direct, data-driven sourcing model.

Download the free guide now to see how your firm stacks up against the competition and what leading firms like Silversmith and LFM Capital are doing to accelerate their proprietary advantage today.

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