Top deal sourcing best practices from leading investment teams

table of contents

Capital market deal success depends on increasing the velocity and volume of deal flow, so it’s critical that every venture capitalist has a solid deal sourcing process in place to discover high-value, high-potential companies and startups. 

To close a single deal, the average firm often looks at dozens of opportunities, so efficient, streamlined deal sourcing is a must. When firms are able to source lots of deals, they can evaluate more opportunities and increase their chances of finding the potential investments that are the most likely to succeed. 

To find the most promising deals faster, private equity firms, venture capital teams, and investment banks need to follow a structured, predictable approach to deal origination and due diligence. 

Let’s examine some deal sourcing best practices, and look at the ways leading capital markets firms are improving their deal sourcing process. 

Overestimate the amount of time you'll need to spend and focus on high-quality leads

Deal origination is a top priority for firms, and it’s not something you can just focus on periodically. Be prepared to put continuous effort into your deal sourcing strategy, week after week, month after month, and year after year.

Build your pipeline by developing relationships with a wide variety of companies and putting regular time and effort into deal sourcing. After all, you never know where your next deal will come from, so your best strategy is to focus on many possibilities to find the few that are highly actionable (either now, or down the road).

Analyze and review deal sourcing strategies regularly to improve consistently 

Where do your best deals come from? Are your best referrals coming from co-investors? LPs? Contacts within your portfolio companies? Somewhere else? Do the research to identify which sources are sending the highest-quality deals to fill your pipeline. Go beyond the number of leads you get, and drill down into the quality of the closed deals.

Then use that information to figure out the best places to invest your time. For example, you might get more leads from LinkedIn or webinars, but fewer of those leads might end up being short-list prospects.

With your ROI research, identify the channels you should put more time into, and which ones you can de-prioritize.

Use varied methods of communication to test which are most successful

When possible, use multiple modes of communication when you’re connecting with prospects and deal sources. You’ll get maximum coverage if you combine email, phone calls, trade shows, conferences, and/or social media. 

That said, if you know a potential investor or founder prefers email or the phone, use their preferred method of communication.

Finding email addresses can be challenging, but there are tools that can help. Some private equity firms, for example, use online databases like or Rocket Reach to get addresses. Additionally, you can test out a number of simple formulas like {first initial} + {last name} @ {company name} to see if your message bounces back. 


It may take a long time to get through to your target companies. Remember that the people you’re trying to reach likely receive a lot of cold calls and emails, so be patient. Continue reaching out regularly—some say it takes three calls and three emails to get a response. If you’re using a relationship intelligence CRM platform, you can gain new insights into who on your team may be the best possible person to reach out to a prospect and set reminders for yourself to follow up at a regular cadence.

Numbers are everything when it comes to improving deal sourcing, so expect to reach out to a large pool of prospects before you land on a small number of promising investment opportunities. 

Establish a consistent follow-up cadence so you never forget a potential relationship

Today’s capital market deals move so quickly that you can’t afford to hesitate. If you do, you’ll lose out on some of the best opportunities. Don’t let conversations with great companies (or excellent referral sources) die—stay in touch. Even a passed lead may become an invaluable partner, and a leader not ready to make a change today may change their mind months or years down the road. 

Consistent communication like this is important with all your relationships, but it’s particularly crucial with your top-priority opportunities. Once you’ve spotted a great deal, stay in touch as much as possible. Regular, thoughtful follow-up makes private companies and referrers feel valued because they know they are at the top of your mind.

Excellent communication can be a big differentiator for your firm. Companies and sources will take notice of the way you interact, and better proprietary deals will flow your way, giving you a competitive edge.

Technology platforms and intelligent CRMs like Affinity can ensure consistent communication and reduce the likelihood that you will forget to follow up. Find out how Affinity can help you keep track of conversations and remind you when it’s time to reach out to a prospect, investor, or referral source again.

Gather data from multiple sources to make more informed decisions

The state of companies and investors is moving at a lightning-fast pace. Company valuations can fluctuate, and a VC or PE firm that’s investing today with one strategy may not be using the same strategy tomorrow, so you need recent metrics and insights you can count on. 

As you’re sourcing deals, search according to deal criteria and dates, as well as the activity that has been going on in the last 30 days for a specific prospect or investor. 

Relationship intelligence platforms like Affinity simplify this information-gathering process by providing proprietary, first-party data enrichment as well as additional details from external data partners like Pitchbook and Crunchbase in a single platform. 


Build a tech stack with tools purpose-built for dealmaking

Having the right tools in your VC tech stack, private equity tech stack, or M&A tech stack helps you better evaluate the opportunities you’re pursuing so you can better identify the most impactful relationships in your business network and the most lucrative deals available for your team.

You need tools that can keep track of all the data relating to your key relationships and deal activity in an easy-to-access central format, without the hassle of manual entry or having to track down your team members for the intelligence you need at any given time. 

Eliminate the guesswork and streamline your entire deal origination strategy with a technology platform that helps you build and manage your pipeline.

Why do private equity firms, venture capital firms, and investment banks choose Affinity over other CRMs?

To optimize your firm’s deal sourcing, you have to rely on your network, and that means monitoring and maintaining strong relationships. 

While Excel spreadsheets and transactional sales-based CRM solutions like Salesforce work well for short, purchase-oriented deals, Affinity is tailor-made for complex, long-term dealmaking.

Not all leads will turn into short-list prospects right away, but if the opportunity to make a deal presents itself a year (or even 5 years) down the road, Affinity can help make sure you’re ready by capturing all of your relevant contact and deal data automatically.

Affinity’s AI-drive algorithms also calculate and quantify relationship strength, helping you prioritize where you spend your limited deal sourcing time and keep your most important relationships active.

Talk to an Affinity expert today to find out how leading capital market firms are finding, managing, and closing more deals with an automated relationship intelligence CRM.


posted in
share this

Interested in learning more?

Reach out to us and get a personalized demo

Talk to Sales