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How New School Investment Banks Outperform the Competition

Earlier, Faster, Smarter: How New School Investment Banks Outperform

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October 26, 2021

While the investment banking industry has seen its fair share of changes over the last century and a half, the level of disruption banks have faced over recent months is enough to send JP Morgan rolling in his grave. But leading firms refuse to let global pandemics,technology threats, or evolving company requirements defeat them.

Instead, they're taking advantage of these changes by reinventing the way they do business. They're differentiating themselves and positioning their firms for growth by adopting a new school approach to finding and closing deals. 

Rather than relying solely on traditional networking and personal relationships, these banks harness the latest data and technology to innovate, fill their pipelines, and add value on both the sell- and buy-side. Here are a few of the new school tools and techniques leading banks leverage to take a proactive, agile, and streamlined approach to finding and closing deals. 

Use Data Signals to Connect Earlier

Due to an uptick indirect sourcing, banks today must compete not just with each other, but also against PE and VC firms for the same deals. Meanwhile, technology has made it easier for new businesses to fly under the radar and grow successfully without taking funding. 

That's why modern investment banks are using data to proactively spot and nurture relationships with promising non-transacted companies earlier in their life-cycles. However, accurate and relevant information about these founder-owned businesses has traditionally been scattered, messy, and hard to find.

New school firms are turning to the latest data service providers to surface highly accurate contact information and Nine key types of data signals for bootstrapped opportunities. This allows them to approach up-and-coming these businesses earlier and with more personalized pitches that leave a lasting impression!

Automate Processes to Move Faster

Proactively sourcing and researching opportunities has historically been a slow and highly manual process, particularly when it comes to non-transacted companies. Not to mention, firms today are experiencing a deal boom and struggling to find the resources to stay on top of active inbound deals "let alone scale operations and strategize for the future.  

Fortunately, new data and technologies have made it possible for firms to accelerate workflows, rapidly change direction, and execute with greater precision than ever before. Modern banks are building technology stacks that help streamline processes by automating administrative tasks, enabling firms to reach more prospects faster while freeing teams to focus on more strategic work. 

While every firm's tech stack is unique, new school dealmakers' tech stacks typically have 3 core components that seamlessly integrate and pass information back and forth between one another. Together, these tools equip firms to quickly adapt to evolving market conditions as well as plan ahead to systematically fill early-stage deal pipeline.

Harness Technology to Work Smarter

Once upon a time, the dealmakers with the strongest networks, longest relationships, and biggest names were able to negotiate the best deals. But relationships only get banks so far these days. Domain expertise, market intelligence, and proprietary resources are now the driving forces behind winning business and commanding bigger fees.

New school firms are harnessing emerging tools and tactics to quickly develop domain expertise, establish proprietary perspectives, and add value for their clients. For example, "It's really important for us not to send our clients the same opportunities that are at the top of everyone else's lists," says Kevin Schwab, associate at leading investment banking firm and Sourcescrub customer Copper Run

When engaging with a new firm, the team starts by identifying conference and association lists in Sourcescrub that align with the client's specific industry and geographic criteria. "We then get more specific and filter these lists by data signals like employee count and ownership type to quickly eliminate companies that aren't a great fit," Kevin explains. "This gives us some quick wins and also provides insight into additional keywords we can use to surface other highly-relevant, non-transacted companies in Sourcescrub." 

Think and Grow Different: Get the Free Guide

These are just a few of the new school tools and tactics leading investment banks use to be earlier,faster, and smarter than the competition. Want to learn how firms like Copper Run are attending the highest-value conferences, keeping their prospect data organized and actionable, and developing proprietary add-on market insight?

Download our latest guide, Think and Grow Different: Dealmaking Strategies for Investment Banks.