How to Win:The Five S’s of Deal Sourcing           Robert J. Fitzsimmons Managing Partner, High Road Capital Partners     ...
Why is Deal Sourcing Important• Large inefficient market (11,000 deals in  Large,                    (11 000  2010)• Quali...
The Five S s of Deal Sourcing              S’s•   Sources•   Strategies•   Signature    Si•   Spreading the word•   Statis...
Sources•   Companies•   Owners•   Intermediaries           di i•   Advisors•   Deal aggregation websites•   Fundless spons...
CompaniesRevenues         Total Number     S Corp   C Corp$10 – 50 mm            126,228    73,682   52,546$50 – 100 mm   ...
Companies/Owners– How many are relevant based on industry, size,  profitability– Considerations   •   Reaching the right p...
Intermediaries• Intermediaries  – Sell-side investment bank  – Sell side broker    Sell-side  – Buyside investment bank  –...
Non traditional        Non-traditional sources• Professionals (1.1 million attorneys, 500,000                (1 1         ...
Strategies• Direct vs. indirect         vs• Inverse relationship between size and  representation• Investment strategy dri...
Investment Strategies•   Value buyer•   Buy and build•   Cost    C cutting/efficiency generator             i / ffi i•   C...
Sourcing Strategies• Direct                • Indirect  – Companies              –   Intermediaries  – Owners              ...
Strategies• Reputation x share of mind = deal flow• Build reputation (signature)  – Ni h expertise    Niche       ti  – Ge...
Signature• Varies by market but you must be consistent            market,• What do different audiences want?  – Companies:...
Spreading the word•   Email•   Phone•   ACG/Capital    ACG/C i l Roundtable/industry events                        d bl /i...
The Deal Flow Cycle                  InboundDeal flow                    EmailsFilter                       Press releases...
Statistics• Deal flow funnel/waterfall  – Top down, bottom up• Industry stats  – Comparison of self to market
Keys to Success• Consistent focused deal sourcing effort  Consistent,  (strategies, sources)• The right message to the rig...
High Road Capital Partners Keynote @ Deal Sourcing Conference
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High Road Capital Partners Keynote @ Deal Sourcing Conference

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How to Win:
The Five S’s of Deal Sourcing
Robert J. Fitzsimmons
Managing Partner, High Road Capital Partners
The Capital Roundtable Dealsourcing Conference
May 26, 2011

Published in: Economy & Finance, Business
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High Road Capital Partners Keynote @ Deal Sourcing Conference

  1. 1. How to Win:The Five S’s of Deal Sourcing Robert J. Fitzsimmons Managing Partner, High Road Capital Partners The Capital Roundtable May 26, 2011
  2. 2. Why is Deal Sourcing Important• Large inefficient market (11,000 deals in Large, (11 000 2010)• Quality versus quantity versus probability• One deal a year can be the difference between top quartile and back of the pack il db k f h k• Back end is useless without the front end• Investment strategy drives sourcing strategy
  3. 3. The Five S s of Deal Sourcing S’s• Sources• Strategies• Signature Si• Spreading the word• Statistics
  4. 4. Sources• Companies• Owners• Intermediaries di i• Advisors• Deal aggregation websites• Fundless sponsors• Friends & family
  5. 5. CompaniesRevenues Total Number S Corp C Corp$10 – 50 mm 126,228 73,682 52,546$50 – 100 mm 16,517 ,$100 – 250 mm 9,695$250 + mm 7,48550 mm + 33,697 14,192 19,505 Source: IRS data, 2008
  6. 6. Companies/Owners– How many are relevant based on industry, size, profitability– Considerations • Reaching the right person • Getting their attention • Getting to yes • Getting to a closing
  7. 7. Intermediaries• Intermediaries – Sell-side investment bank – Sell side broker Sell-side – Buyside investment bank – B id b k Buyside broker
  8. 8. Non traditional Non-traditional sources• Professionals (1.1 million attorneys, 500,000 (1 1 attorneys 500 000 CPA’s, 650,000 financial planners/stock brokers)• Deal aggregation websites/services (a handful, but growing)• Fundless sponsors (est. 100 – 200)• Friends and family (unlimited)
  9. 9. Strategies• Direct vs. indirect vs• Inverse relationship between size and representation• Investment strategy drives sourcing strategy
  10. 10. Investment Strategies• Value buyer• Buy and build• Cost C cutting/efficiency generator i / ffi i• Capital markets arbitrage• Family business transition• Turnaround
  11. 11. Sourcing Strategies• Direct • Indirect – Companies – Intermediaries – Owners – Advisors – Fundless sponsors – Deal aggregation sites – Friends & family
  12. 12. Strategies• Reputation x share of mind = deal flow• Build reputation (signature) – Ni h expertise Niche ti – Get things done – Easy/honorable to deal with• Grow mind share (spread the word)
  13. 13. Signature• Varies by market but you must be consistent market,• What do different audiences want? – Companies: highest price take care of employees price, – Owners: highest price, take care of company, help me achieve engagement/disengagement objective – Intermediaries: certainty of close, speed to close, no retrading, easy to deal with – Advisors: fit with client, easy to deal with, recognition – Fundless sponsor: certainty to close, no retrading
  14. 14. Spreading the word• Email• Phone• ACG/Capital ACG/C i l Roundtable/industry events d bl /i d• Meetings• Press (press releases, interviews)• Social media
  15. 15. The Deal Flow Cycle InboundDeal flow EmailsFilter Press releasesCompleted deals Networking Calling programs C lli Outbound
  16. 16. Statistics• Deal flow funnel/waterfall – Top down, bottom up• Industry stats – Comparison of self to market
  17. 17. Keys to Success• Consistent focused deal sourcing effort Consistent, (strategies, sources)• The right message to the right audience (signature, spreading the word)• F db k l Feedback loop, adjust efforts as needed dj ff d d (statistics)

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