Sourcing GPT Accelerates Acquisition Searches With Contextualized, Accurate Information, While Protecting Confidentiality of Search Activity
SAN FRANCISCO, June 15, 2023— SourceScrub LLC, the premier deal-sourcing platform, today announced the launch of Sourcing GPT, a generative AI tool with the potential to upend the way private equity firms, investment banks, and corporate development teams identify and pursue acquisition targets.
Sourcing GPT applies the generative AI capabilities of OpenAI’s GPT models to SourceScrub’s best-in-class deal-sourcing software. Now in customer beta testing, the generative AI tool joins a suite of AI-driven capabilities SourceScrub provides to enable business development and deal-sourcing teams to find and develop the right opportunities faster than the competition.
Generative AI is poised to dramatically improve and accelerate typical dealmaking processes.
“We are all hearing about exciting new ways to apply AI technology, and it is coming to private equity whether we like it or not,” said Jessica Ginsberg, Managing Director at LFM Capital.
Sourcing GPT slashes the time required to complete the critical process of developing a deal-sourcing market map and outreach strategy, reducing the time required for these tasks from hours to minutes. It also addresses the problem of AI-induced “hallucinations” and security risks.
SourceScrub’s platform already applies AI techniques to classify and synthesize data, identify similar companies, interpret web text, estimate revenue, determine industry categories and company descriptions, and more.
With this new leap forward, acquirers can apply generative AI’s capabilities to quickly explore niche industries, identify companies that are similar to ones the team recently acquired or that have attracted its attention, expand a narrow list of similar companies, and build a more robust market map tuned to a firm’s thematic focus. The new tool then allows users to automatically generate personalized draft emails to key executives of companies that emerge as potential acquisition targets, referring to specific, recent developments such as their participation in a trade show or a surge in hiring activity. Using Sourcing GPT allows dealmakers to complete this process in only a minute or two, compared to at least 30 minutes using earlier software tools.
“We view this technology as transformative; it will dramatically improve dealmaking processes,” said SourceScrub CEO Jim Obsitnik. “In a highly competitive market, when speed and accuracy matter more than ever, it helps dealmakers reach the right decisions more quickly and take action faster.”
Crucially, SourceScrub’s new software addresses two key problems in deploying generative AI to deal sourcing. It reduces the technology’s tendency to invent facts if it doesn’t have a ready answer, a phenomenon dubbed “hallucinations.” It also ensures the privacy of clients’ insights. One of the barriers to deploying generative AI tools for proprietary research has been the fear that model strained to absorb and learn from each query will end up accidentally leaking insights to business rivals, but SourceScrub has built the application to ensure that any data supplied by users will remain secure.
SourceScrub has shared the new application with a large group of its current customers, all of whom describe it as a significant advancement in their capabilities and say they plan to incorporate it into their deal analysis process immediately.
Being on the leading edge of technology from a deal sourcing point of view has always been important to LFM, Ginsberg notes. Today, that means using AI – and Sourcing GPT. “We’ve already used many of the AI-driven capabilities in SourceScrub to dramatically increase the reach of our origination efforts, and the size of our deal pipeline. We see Sourcing GPT as a way to strengthen the output of our team and allow us to act more quickly on the most exciting potential targets.”
In an increasingly competitive private equity universe,“ sector expertise and insight are how we find the best opportunities and win deals,” said Jordan Margolin, Head of Business Development at VSS Capital.
“I expect Sourcing GPT will make us more effective at quickly mapping new markets and building outreach content that will breakthrough.”
The deal will also help investment banks serve their private equity clientele more effectively. Dominic Chan, Director at Vaquero Capital, says that he already relies on SourceScrub’s tools to give his team access to critical data that is otherwise unavailable.
Sourcing GPT further accelerates Vaquero’s ability to thoroughly understand and map a market and gauge competitive dynamics, Chan adds. “Based on improvements SourceScrub has helped us make in deal flow and research efficiency, we would expect these new capabilities to have a dynamic and measurable impact.”
Sourcing GPT is built with OpenAI’s GPT models, hosted in SourceScrub’s secure Azure infrastructure. It applies the most up-to-date generative AI capabilities with SourceScrub’s database, relying on the intelligence of the SourceScrub platform to perform the selection, analysis and reporting. SourceScrub is working closely with beta users to identify and develop additional use cases for this innovative tool, to create even more value for dealmakers.
SourceScrub is the market-leading AI-powered deal sourcing platform for investment and M&A firms looking to research, find, and connect with founder-owned companies. Founded in 2015, SourceScrub provides deal-ready data, purpose-built tools, and on-demand experts-in-the-loop to give firms a decisive advantage so they never miss a deal. For more information, see https://www.sourcescrub.com.