I'm running a self-funded, geographically restricted search in the DC area. I've initially been focused on broker outreach to build those relationships to start. I'm now looking to build out my proprietary deal-flow pipeline. I think proprietary outreach is particularly important for my search mainly because of my geographic restriction - sitting around waiting for companies to be listed will be pretty slow-going.
I see two options for proprietary deal-flow generation and management:
Option 1: I could go the traditional route for this deal flow: hire 4-6 unpaid interns, generate a big list of target companies by using things like ZoomInfo + scraping websites (I'm a coder so can actually write those scripts myself), and reach out myself
Option 2: I could outsource this instead. The first company I'm looking at, CapTarget, will build a company list (+a few hundred companies each month), reach out to them via email 5-7 times, and track responses. They have a flat monthly fee. There may be other alternatives that offer more or less for this service (I'd love to hear more about any such alternatives you know of).
The big pros I see of outsourcing are:
1) Minimizing time I have to spend on intern hiring
2) Enabling my pipeline to be robust even while I'm distracted by due diligence/post-LOI excitement
3) I can only search part-time this summer due to a preexisting commitment, which will make managing interns, keeping up dealflow, AND assessing deals pretty difficult. This problem goes away after the summer.
The cons I see are:
1) Unclear quality generated from deal-flow partner - hard to know if I'm really reaching out to all available companies + if they are high-quality
2) Interns could potentially be useful outside of just generating company lists (?)
3) ???
Would love advice here, as well as recommendations (and anti-recommendations) for potential companies to consider partnering with (particularly ones who don't charge a finder's fee, or ones that you've had a positive experience with personally).
Pros and cons of outsourcing proprietary deal-flow generation?
by a searcher from Harvard University
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