5 ways AI can help accelerate
the Deal Sourcing Process
Deal origination, or deal sourcing, is a process through which finance professionals involved in investment banking, private equity, venture capital and corporate development identify potential targets.
The deal origination process is vital, as most brokers and investment banks (especially the smaller ones) have to be proactive as they can’t rely on potential acquirers or targets approaching them.
It’s also very competitive, as investment firms dealing in M&A vie with each other. As success often depends on having the right connections as well as industry-specific knowledge for a particular deal, participants need to have put some strong foundations in place:
- build a network
- build a database of targets
- mine that database
- make the phone calls
- do the ‘’grunt’’ work
Identifying the database of targets is key, and a suitable set of search criteria is vital; too narrow, and you limit the likely success rate, too broad, and your ‘universe’ is unmanageable.
The current approach and challenges to deal sourcing:
For finance professionals, there are two main approaches to managing this deal origination process – traditional and online – but even with the many online platforms currently available, the problem remains that the process is extremely labour-intensive and time-consuming.
The traditional approach relies largely on a broad network of contacts, referrals and a good reputation. These all remain important, of course, but on their own are time consuming and limiting. As a result, online deal origination software has become increasingly popular and necessary as a way to rapidly increase the universe of potential targets and perform due diligence on them.
However, many of the current online platforms rely, to some extent, on manual data analysis, and where a CRM system does enable some automated data sorting, it’s often not at a particularly sophisticated, targeted, comprehensive or accurate level.
This still means hours of manual searching to identify potential investment targets.
What’s the solution to the deal sourcing challenge?
An award-winning new AI-based platform offered by mnAI is set to revolutionise the deal origination process by providing instant access to filtered data and analysis across sectors, companies, geographies and individuals.
This industry-disrupting tool is the most comprehensive data source for UK company information, with billions of data points (and 100m+ added every week) to keep everything up to date and allow real-time insights.
The mnAI platform is, to date, the most sophisticated application of machine learning technology for investors, and is set to transform the deal sourcing landscape.
Here are 5 ways that mnAI is set to transform the deal sourcing process:
- AI deal origination saves time and money
AI has automated the process of searching for companies and reduced (or even eliminated) the need for manual data analysis. This means significant time and cost savings, and frees up in-house researchers and analysts so that they can focus on getting the deal process underway.
With mnAI, finance professionals can conduct searches in seconds and access in-depth data that would previously have taken hours, or even days, to gather and analyse.
mnAI can search in real-time by geographical area, industry, sector and even the gender of company founders, directors and shareholders.
- AI deal sourcing enables faster and more effective identification of potential acquisitions
AI allows firms to identify potential acquisitions faster and more accurately. It provides real-time company information, including data sheets, networks and connections and company performance.
The billions of data points in the mnAI system, incorporating millions of statutory records, enables rapid lead generation for investors, and, crucially, can highlight opportunities which might have been missed in a manual search.
- AI enhances due diligence
AI helps to uncover the relationships between companies and directors for better due diligence, to ensure quick and full understanding of a company and the people in it.
mnAI profiles company director and secretarial appointments and tracks their current and historic business activity. It enables easy identification of corporate group structures, so that you can see immediately how a potential investment is linked to other companies.
The detailed information available allows you to create visual networks of shareholders, directors and companies, and to view balance sheets and P&L reports as well as debtor and creditor networks, adding insight and depth to your due diligence process.
- Identifying future growth
Machine learning generates predictive analysis, making it easier to identify the companies that may grow in the future.
mnAI allows you to search for any company that has raised external finance in the last 10 years, and to track company ownership, valuations and more.
With the real-time analysis available, investors can spot trends in industries, sectors and geographical areas that were invisible before.
- AI deal origination makes M&A teams more effective and proactive
With access to all mnAI’s data, investment teams can seek out deals and opportunities quickly and easily (as well as filtering out those that aren’t right). That means more targeted networking, marketing and lead generation, cutting down on wasted effort and making success more likely.
How is mnAI different from what’s already out there?
It’s the number of data points, speed and level of detail – for example it is currently the only one which can identify the gender of the founders, directors and shareholders.
Its sophisticated search ability includes over 350 search variables, allowing quick and easy targeting of companies that meet precise criteria. Search results are produced in moments and are presented in a simple to use dashboard. This level of customisation can save hundreds of hours of manual research.
Unique visualisation technology reveals networks and connections across over 7 million companies in all sectors, geographies and industries, and millions of individuals, showing you precisely who is connected to whom.
This AI approach to deal sourcing provides unrivalled intelligence for finance professionals. It is new, but it won’t be long before the finance industry regards it as an essential tool.
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