What are the key steps to sourcing deals in Financial Services?
Sourcing deals in financial services is the process of finding and evaluating potential investment opportunities in the sector. Whether you are a venture capitalist, a private equity firm, a corporate development team, or a financial advisor, you need to have a systematic and effective approach to identify, screen, and pursue the best deals for your strategy and goals. In this article, we will outline the key steps to sourcing deals in financial services and share some tips and best practices to improve your deal flow and quality.
The first step to sourcing deals in financial services is to define your criteria for what makes a good deal for you. This includes factors such as the size, stage, sector, geography, valuation, growth potential, competitive advantage, and fit with your portfolio and vision. Having clear and consistent criteria will help you narrow down your search, filter out irrelevant or unattractive deals, and communicate your value proposition to potential targets.
-
Nicholas Tan
Seeking Mid-Career Switchers from SMEs to Join the #1 AIA SG Team | Court of Table (COT) | Ex-C-suite, Business Builder & Sales Coach | Golf Enthusiast & Avid Watch Collector ⛳⌚
It is important to understand your clientele and who you want to work with. What I find works best is being relatable to the target audience you intend to reach out to. People buy from people they like. And the more relatable you are, the more the chances of you being liked by someone else is.
The second step to sourcing deals in financial services is to build your network of contacts and sources that can provide you with deal leads, referrals, and insights. This includes cultivating relationships with founders, entrepreneurs, executives, advisors, bankers, brokers, consultants, lawyers, accountants, and other industry players. You can also leverage your existing portfolio companies, alumni networks, industry associations, events, and online platforms to expand your reach and visibility. Building your network will help you access more and better deals, gain trust and credibility, and get access to exclusive or proprietary deals.
-
Nicholas Tan
Seeking Mid-Career Switchers from SMEs to Join the #1 AIA SG Team | Court of Table (COT) | Ex-C-suite, Business Builder & Sales Coach | Golf Enthusiast & Avid Watch Collector ⛳⌚
Nothing works best than a referral network for your business. The way to achieve this is to have strong foundational processes that govern the way you do your business. What I do, is to make sure that I give a 100% for every single meeting whether it is for $1000 or for $100,000. The experience you deliver to a prospective client is what gives them the confidence to share about your services and refer you upwards. Building your network through not only good but great experiences helps you achieve this.
The third step to sourcing deals in financial services is to research your market and identify the trends, opportunities, challenges, and gaps that exist in the sector. This includes analyzing the industry dynamics, competitive landscape, customer behavior, regulatory environment, technological innovation, and social impact of the financial services sector. You can also use various tools and databases to track and monitor the deal activity, performance, and valuation of the companies in your target market. Researching your market will help you spot emerging or underserved niches, identify potential disruptors or synergies, and evaluate the attractiveness and feasibility of the deals.
The fourth step to sourcing deals in financial services is to outreach and engage with the potential targets that match your criteria and interest. This includes crafting a compelling and personalized pitch that showcases your value proposition, expertise, and differentiation. You can also use various channels and methods to reach out and connect with the targets, such as email, phone, social media, referrals, introductions, or meetings. The goal of this step is to generate interest, establish rapport, and initiate dialogue with the targets.
-
Nicholas Tan
Seeking Mid-Career Switchers from SMEs to Join the #1 AIA SG Team | Court of Table (COT) | Ex-C-suite, Business Builder & Sales Coach | Golf Enthusiast & Avid Watch Collector ⛳⌚
There are really 2 parts to this role. Outreaching and attracting. The truth is, most consumers don't actively seek out financial advice, most time's something has to trigger them to do it, be it a bad experience, an advertisement, or someone asking them to give them a chance to share what they have to offer. Understanding your potential clientele and what they might be interested in is key to this as your opening pitch must be something that strikes their chord.
The fifth step to sourcing deals in financial services is to qualify and prioritize the targets that respond to your outreach and engagement. This includes conducting a preliminary assessment of the targets based on their fit, potential, readiness, and alignment with your criteria and goals. You can also use various tools and techniques to score, rank, and categorize the targets according to their urgency, importance, and viability. The goal of this step is to filter out the unqualified or unsuitable targets and focus on the most promising and relevant ones.
The sixth and final step to sourcing deals in financial services is to follow up and nurture the relationships with the targets that you have qualified and prioritized. This includes providing value, feedback, and support to the targets, as well as maintaining regular and consistent communication and interaction. You can also use various strategies and tactics to build trust, influence, and rapport with the targets, such as sharing insights, resources, referrals, testimonials, or case studies. The goal of this step is to move the targets along the deal pipeline, overcome objections or challenges, and close the deal.
Rate this article
More relevant reading
-
Financial ServicesHow can you adjust for market conditions when valuing financial services?
-
Corporate FinanceHere's how you can enhance financial decision-making through creativity.
-
Business AdministrationHow can you ensure transparent and unbiased benchmarking for financial performance?
-
Business ManagementHow can you create a financially transparent organization?