Mavengigs

Mavengigs is a global consulting firm providing consulting services for Mergers & Integrations (M&A) and Transformations. Through our network of independent resources and partners, we serve clients in USA and Europe. Mavengigs is a division of Panvisage Inc. (a holding company with interests in consulting, education, real estate and investments).

This content is a synopsis from multiple sources for easy reference for educational purposes only. We encourage everyone to become familiar with this content, and then reach out to us for project opportunities.

Deal Flow

M&A deal flow is the quantity and quality of investment opportunities (investment pitches, business plans, ideas) and the process by which firms’ source, evaluate, and win investment deals. Good deal flow is a key indicator of a successful fund, and it’s how PE firms develop and maintain their pipelines.

Deal teams may be tempted to rest on their laurels, but leading PE firms are continually building a high-quality deal flow pipeline to stay ahead in a competitive marketplace.

Private equity deals are complex, long-term undertakings, and it’s important that every step in the deal process (deal sourcing to due diligence to exit) is done efficiently.

Deal Flow Pipeline

Building a high-quality deal flow pipeline is no easy task but can be done by building the right system and network. These inbound opportunities may come from pre-existing networks or relationships, word-of-mouth within the investment community, or interest and recognition from other investors. While investors encounter hundreds of opportunities monthly, only a few are selected for investment, often following a 100:1 ratio. This curation process is essential in deal flow, especially in M&A deals, as it funnels out unfavorable prospect.

Managing such a flow systematically involves storing deal information in a standardized format, implementing a structured approach to deal flow process with clear stages, each with specific entry and exit criteria, and organizing meetings to monitor progress.

There is a need to keep the team aligned on investment strategy and deal thesis. The core deal workflow includes identifying new prospects based on search criteria, then collecting and analyzing information, advancing deals through stages, including prospect listing, further evaluation, due diligence, transaction planning, signing, and closing.

Deal Flow pipeline is impacted by economic conditions (more deals during periods of economic growth versus a recession), business trends (‘the next big thing’ like more deals in smart tech startups, AI, VR, etc.) and government regulations (like security rules, etc).

Sources of Deal Flow

Firms employ various sources to generate deal flow:

• Networking: Better deal sourcing is a result of better relationships, as people do business with other people they know, like and trust. Most high-quality deals come from warm connections in active well-maintained networks.