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High Road Capital Partners Keynote @ Deal Sourcing Conference
 

High Road Capital Partners Keynote @ Deal Sourcing Conference

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How to Win:

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

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    High Road Capital Partners Keynote @ Deal Sourcing Conference High Road Capital Partners Keynote @ Deal Sourcing Conference Presentation Transcript

    • 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
    • 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
    • The Five S s of Deal Sourcing S’s• Sources• Strategies• Signature Si• Spreading the word• Statistics
    • Sources• Companies• Owners• Intermediaries di i• Advisors• Deal aggregation websites• Fundless sponsors• Friends & family
    • 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
    • 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
    • Intermediaries• Intermediaries – Sell-side investment bank – Sell side broker Sell-side – Buyside investment bank – B id b k Buyside broker
    • 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)
    • Strategies• Direct vs. indirect vs• Inverse relationship between size and representation• Investment strategy drives sourcing strategy
    • Investment Strategies• Value buyer• Buy and build• Cost C cutting/efficiency generator i / ffi i• Capital markets arbitrage• Family business transition• Turnaround
    • Sourcing Strategies• Direct • Indirect – Companies – Intermediaries – Owners – Advisors – Fundless sponsors – Deal aggregation sites – Friends & family
    • 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)
    • 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
    • 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
    • The Deal Flow Cycle InboundDeal flow EmailsFilter Press releasesCompleted deals Networking Calling programs C lli Outbound
    • 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 right audience (signature, spreading the word)• F db k l Feedback loop, adjust efforts as needed dj ff d d (statistics)