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Deal Sourcing

Private Equity glossary · Private Equity Fundamentals

Definition

The process of identifying and securing access to potential investment opportunities; proprietary deal flow is highly prized in competitive markets.

Deal Sourcing in plain English

Deal sourcing is simply how an investment firm finds companies to buy in the first place — before you can analyze a deal, you have to know it exists and get invited to bid on it. Think of it like a chef hunting for the best ingredients: some are laid out for everyone at the public market, where every buyer competes and prices get bid up, but a chef with a private line to one farm gets first pick at a fair price. That private line is called 'proprietary deal flow,' and it's prized precisely because you're not fighting a crowd of other buyers, so you can often pay less and win more often.

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