Deal sourcing is the work of finding opportunities to invest in or advise on, ideally before somebody else has organised a competitive process around them. It is the front of the funnel for a private equity firm, a venture fund or a corporate development team, and it is the part of the business most likely to be described in adjectives rather than measured. This page sets out what it actually consists of and the one field that turns it into something measurable.
Sourcing is not the same as screening
Sourcing is getting the opportunity in front of you. Screening is deciding quickly whether it is worth time. Conflating them makes a funnel unreadable, because a fund that sees a great deal of the wrong thing looks identical on a count to one that sees fewer better things. They are different problems with different fixes.
The four channels, and their different currencies
Intermediaries cost partner time built over years. Direct outreach costs associate hours at a low conversion rate. Reputation costs published work and patience. Paid data costs money and produces lists somebody still has to act on. None of them is free and none of the costs appear in the same budget line.
Proprietary means nobody else was asked
Not early access, not a warm introduction into a live process, not a friendly banker. If a process exists and others are in it, the deal is intermediated however good the relationship was. Firms that hold that line find their genuinely proprietary share is smaller than they thought, which is the useful discovery.
The field that makes it measurable
Source, recorded at entry, from a list of three or four options. Without it no firm can say which channel converts, so the resourcing argument gets settled by whoever is most confident in the room. It is one dropdown and it is the highest-return field in the entire record.
Questions people ask about what is deal sourcing
What does deal sourcing mean?
Finding opportunities to invest in or advise on, ideally before somebody else has organised a competitive process around them.
What counts as proprietary?
Nobody else was asked. Early access and a warm introduction into a live process are intermediated, however good the relationship.
How do you measure sourcing?
Record the source on every opportunity at entry. Without it, the question of which channel pays has no evidence behind it.