Private capital deal success depends on increasing the velocity and volume of deal flow, so it's critical that every investment team has a solid deal sourcing process in place to discover high-value, high-potential companies and startups.
The market has become increasingly competitive. Our 2025 Benchmark Report shows that 50% of investors cite sourcing new deals as their top priority, while 42% identify competition as the biggest factor impacting deal flow. With just 20 VCs capturing 60% of total capital raised in 2024, smaller and mid-sized firms face an uphill battle to secure quality deals before their competition.
To close a single deal, the average firm often looks at dozens—if not more—of new opportunities. Efficient, streamlined deal sourcing is a must.
When you can increase the number and quality of deals in your pipeline, you’re able to evaluate more opportunities, uncover deal referrers, and increase the chance of finding potential investments that fit your fund’s thesis and focus.
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 you can improve your deal sourcing process.
Overestimate time investment 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.
Overestimate the amount of time you'll need to spend and focus on high-quality leads. Putting regular time and effort into deal sourcing and monitoring companies or founders of interest can elevate your dealmaking. "For 88% of our deals, we either get tipped off to the deal or directly referred by our network," says Sergio Monsalve, Founding Partner of Roble Ventures. Build the top of your pipeline by developing relationships with a wider network of startups, co-investors, and deal referrers.
You never know where or who your next deal will come from, so your best strategy is to focus on many possibilities to find the opportunities that are highly actionable—either now, or down the road.
How can you proactively identify deals before your competitors?
The most effective deal sourcing isn't reactive—it's proactive. Rather than waiting for deals to come to you, use technology to systematically identify companies that match your investment thesis before those opportunities hit the broader market.
Affinity Sourcing helps firms discover high-potential deals by creating saved searches based on specific criteria like industry, stage, location, funding status, and growth signals. Set up automated alerts so you're notified the moment a company matches your parameters or hits key milestones like new funding rounds or executive hires.
The key is building a repeatable system that continuously scans for opportunities rather than relying on ad hoc discovery.
How can AI accelerate your deal research and evaluation?
Manual research across pitch decks, company websites, news articles, and industry databases can consume hours of valuable time. AI-powered tools now eliminate much of this work, letting you focus on relationship-building and strategic decision-making instead of data gathering.
Deal Assist parses pitch decks, documents, and notes to give you instant answers to deal-critical questions. Instead of digging through a 50-slide deck to find revenue projections or competitive positioning, you can ask questions in natural language and get immediate responses.
Industry Insights generates comprehensive market maps in one click, showing you the competitive landscape, funding trends, and emerging players in any sector. What used to take hours of research now takes seconds.
Notetaker automatically captures meeting notes and gleaned insights from virtual meetings, eliminating post-meeting data entry entirely. Every conversation is documented, searchable, and accessible to your team without anyone having to manually update your CRM.
LEAP Global Partners found that having all deal information captured automatically in one place eliminated the manual effort they'd spent reviewing deals. As their team says, "Affinity is at the heart of our investment process."
Prioritize warm introductions over cold outreach
Our 2025 Benchmark Report shows that top firms consistently made more introductions than other firms throughout 2024, ending the year with a 16% year-over-year increase. This isn't surprising—warm introductions convert at dramatically higher rates than cold outreach because they come with built-in credibility and context.
The challenge is systematically identifying these introduction paths across your firm's collective network. Relationship intelligence platforms help you understand who your entire team knows, and how strong those relationships are.
Every relationship in Affinity is automatically scored based on recency and frequency of interactions, giving you a quantifiable way to prioritize which introduction paths are most likely to succeed. Even better, Affinity's Inferred Connections feature reveals shared work histories outside your direct interaction history—former colleagues, board members, or advisors who could make warm introductions even when there's no recent email history.
How often should you review and optimize your sourcing strategy?
It's important to know where your best deals are coming from. Are your best referrals coming from co-investors? Limited partners (LPs)? Contacts within your existing portfolio companies?
Analyze and review deal sourcing strategies regularly to improve consistently. Take the time to track, report, and visualize which sources are sending the highest-quality deals to fill your pipeline. While it's normal for the majority of opportunities to not make it past the origination phase, it doesn't mean sourcing deals is a complete guessing game.
Then use that information to figure out the best places to invest your time. For example, you might get more leads from LinkedIn or events, but fewer of those leads might end up being shortlisted prospects, which means it might not be the most valuable deal sourcing channel.
Identify the channels you should put more time into, and which ones you can de-prioritize, so you can create a more effective investment strategy.
Use varied communication methods to test effectiveness
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, industry events, and even social media.
It also helps you meet potential contacts where they're at. Of course, if you know a potential investor or founder prefers email or the phone, it's best to 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 Hunter.io 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.
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Remember that the people you're trying to reach likely receive a lot of cold calls and emails, so be patient. It may take some time to secure that initial contact at your target companies.
Continue reaching out regularly—some say it takes three calls and three emails to get a response. A relationship intelligence CRM platform can also be helpful to identify the best contact. It's not just who you know but the people your team knows. Tools like Affinity can identify paths of warm introduction to help you connect with founders, investors, or other key contacts at your target companies.
Numbers are everything when it comes to improving deal sourcing, so expect to reach out to a large pool of potential targets before you land on a small number of promising investment opportunities.
Establish consistent follow-up cadence to maintain relationships
Today's private capital deals are competitive. If you lose sight of an opportunity, you'll miss out. Don't let conversations with great companies die—stay in touch. Even a passed lead may become an invaluable partner or referral source. And a leader not ready to make a change today may change their mind months or years down the road.
Establish a consistent follow-up cadence so you never forget a potential relationship. This is important in 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.
But it's important to find a balance between consistent communication and too much. Technology platforms and intelligent CRMs like Affinity can help you set reminders for yourself to follow up at the optimal cadence, so you never let a qualified opportunity fall through the cracks.
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.
How can you make faster, data-driven investment decisions?
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 real-time metrics and insights you can count on.
As you're sourcing deals, data can be a significant asset. Gather data from multiple sources to monitor—or source new—startups that fit your thesis. Affinity Data automatically enriches every contact and company profile with funding history, growth metrics, firmographic data, and biographic information, ensuring you always have investment-ready data at your fingertips.
This enrichment happens continuously and automatically—no manual research required. You'll see recent funding rounds, key executive hires, revenue growth signals, and company trajectory data all in one place. Combined with relationship strength scores that show you who on your team has the best path to introduction, you can quickly prioritize which opportunities deserve immediate attention.
Munich Re Ventures saved 100+ hours per year on manual lead input by letting Affinity automatically capture and enrich deal data. BDC Capital achieved a 5x increase in the number of organizations (32,000) and contacts (105,000) they could effectively track.
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.
Combined with powerful machine learning and AI tools that optimize efficiency, a data-driven approach to deal sourcing can generate critical insights that ensure you're sourcing the best possible deals.
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 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 centralized format, without the hassle of manual entry or having to track down your team members for the intelligence you need at any given time.
Even if you have an existing platform you love, dealmaking tools like Affinity for Salesforce can layer on top of your existing tech stack, like Salesforce CRM. Investing in the right tools helps eliminate the guesswork and streamline your entire deal origination strategy so you can build and manage your pipeline in one place.
Automate deal sourcing workflows to eliminate manual work
Every closed deal is the result of a lot of moving parts and interactions. This can leave room for error and for details to slip through the cracks. Automating required but repetitive actions in the dealmaking process can help firms close deals faster and more efficiently.
Common places where automation can help streamline deal flow management:
Deal discovery and prioritization: Automatically segment deals most likely to close based on deal data such as valuation, stage, and industry. Set up alerts when target companies hit key milestones like new funding rounds or executive changes. Then automatically assign high-priority deals to the right team members.
Deal origination tracking: Boost your deal sourcing efforts by automatically tracking the deal origination details that can improve your team's deal sourcing decisions. Know which sources consistently send quality deals and which channels underperform.
Data enrichment: Reduce the back and forth that can come with deal research by automatically pulling deal-relevant data and contact information into one centralized database. Data enrichment tools can help you source higher-quality deals by delivering hard-to-find data points based on existing datasets.
Activity capture: Take the manual data entry out of record creation, and save your deal team over 200 hours a year, by automatically creating and updating contacts right from your team's email and browser.
Outreach and communication: Stay top-of-mind with key contacts by automatically sending personalized outreach or setting reminders to check in on prospects at the right time based on relationship strength and deal stage.
Tech stack integrations: Instead of spending valuable time toggling between apps and different software, find a deal sourcing platform that ties together all the tools in your tech stack. For example, automatically send deal notifications to Slack to keep your team on top of new deals in the pipeline.
Measure and analyze deal sourcing performance
When it comes to deal sourcing, conversion rate and the number of closed deals are only two metrics you should track. Go beyond the number of leads you get and drill down into the quality of the deals that make it into your pipeline.
Firms are increasingly taking advantage of data analytics in the deal sourcing process. This allows investors to make decisions based on concrete, quantifiable data. It also makes it easier to narrow down the trends and strategies that are most likely to generate lucrative closed-won deals.
Track metrics like:
- Deal source by channel (which sources generate the highest-quality opportunities)
- Time to first meeting (how quickly can you engage promising deals)
- Conversion rates by source (which channels convert at higher rates)
- Relationship strength at first contact (warm vs. cold introduction success rates)
- Deal velocity (how quickly deals move through your pipeline by source)
This increase efficiency, creates a more predictable and repeatable deal sourcing process, and helps you build a portfolio that performs.
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Why do private capital firms choose Affinity over other CRMs?
Sourcing high-quality deals can be a complex and lengthy process. Which means 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-based CRM are enough for simple deals, Affinity is tailor-made for complex, long-term dealmaking.
From relationship intelligence to pipeline management, Affinity helps you stay on top of every deal from origination to close. Whether a deal presents itself right away or 5 years down the road, Affinity captures all relevant contact and deal data automatically, so you're ready to make the most of every opportunity.
Affinity's AI-driven 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.
For firms already managing deals and relationships in a CRM, Affinity helps dealmakers go beyond just contact information and static company data. Affinity makes sure you have everything you need to build relationships and drive deals in one centralized location.
Talk to an Affinity expert today to find out why more than 50% of the top private capital firms are finding, managing, and closing more deals with an automated relationship intelligence CRM.
Deal sourcing FAQs
What is a deal sourcing platform?
Deal sourcing platforms are software or tools designed to help venture capital and private equity firms find and close potential investment opportunities. The right platform can help identify the right deals, and streamline the process to accelerate deal flow through proactive discovery, relationship intelligence, and automated data enrichment.
Modern deal sourcing platforms like Affinity combine multiple capabilities: saved searches that continuously monitor for companies matching your thesis, relationship mapping that reveals warm introduction paths across your firm's network, and AI-powered research tools that eliminate manual data gathering.
How do private equity firms perform research?
There are many ways that private equity firms perform research when sourcing and evaluating potential investment opportunities. The type of research will often vary depending on the stage of the deal, typically becoming more extensive and robust as a prospect moves through the deal pipeline. The goal is to help investors make informed decisions before closing a deal.
Private equity firms often have internal or external analysts and experts to provide insight into the potential success of a prospective company. They'll do market research to understand industry trends and the competitive landscape. Firms will also conduct a high level of due diligence around legal, financial, and operational risks to understand the true value of the opportunity.
Increasingly, firms are using AI and automation to accelerate this research. Tools that automatically parse pitch decks, generate market maps, and enrich company profiles with funding and growth data can reduce research time from hours to minutes while improving data quality.
How does private equity deal sourcing work?
Private equity deal sourcing is the process of finding and uncovering potential investment opportunities that can be turned into lucrative deals.
Deal sourcing starts with a strategy to help identify potential deals that align with a PE firm's investment criteria. Then firms create a target list of prospects and research them to determine if they're a fit for their investment thesis. Once a prospective company is qualified, firms will connect with key contacts within these companies to move them through the deal pipeline.
Unlike venture capital firms (VC firms) that target early-stage, high-risk-high-reward startups, PE firms tend to focus more on sustainable and scalable growth which impacts how firms evaluate their targets when sourcing deals.
The most effective sourcing strategies today combine proactive discovery (using tools to systematically identify target companies), relationship-driven outreach (leveraging warm introduction paths), and AI-accelerated research (automating data gathering and analysis).
What is the difference between deal sourcing and deal origination?
Deal sourcing and deal origination are two terms in private equity, venture capital, and investment banking that are often used interchangeably. But there are slight nuances that differentiate the two.
Deal sourcing is the process of researching, prospecting, and evaluating potential opportunities. Meanwhile, deal origination generally refers to the first step in the process, which is finding the investment opportunities to pitch potential buyers.
In practice, most firms use these terms synonymously to describe the entire process of identifying, qualifying, and engaging with potential investment opportunities.
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