Deal Sourcing Gets a Software Update

Where the Deals Are: Insights from Our Latest Microsurvey

As deal flow dynamics evolve and competition intensifies, understanding the shifting landscape of sourcing is vital. The results revealed a clear signal—traditional deal origination models are no longer the only game in town. Participants showed increasing confidence in alternative strategies like technology-enabled sourcing and proprietary relationships, signaling a transformation in how firms plan to stay competitive.

Technology-Enabled Sourcing Surges

Across all respondents, technology-enabled sourcing (such as AI and data platforms) emerged as one of the top two most-expected deal-generation sources, tied at 26% with proprietary relationships/founder-led sourcing. This marks a striking departure from the historical dominance of bank-led auction processes, which only 11% of respondents now view as a primary source.

Notably, bankers were the most bullish on tech-enabled sourcing, with 31% naming it their top choice. This suggests that those closest to the deal pipeline are seeing real momentum behind sourcing engines powered by data science, automation, and AI tools.

Proprietary Relationships Remain Strong

Alongside tech, proprietary relationships continued to play a central role. 26% of all respondents highlighted this approach, with Corporate Development teams (33%) placing even greater weight on founder-led deals. These relationships are perceived as a more exclusive and controllable route to high-quality targets, especially in a crowded deal market.

Distressed and Carve-Outs See Targeted Interest

Distressed/special situations and corporate carve-outs/divestitures were viewed more selectively. Distressed opportunities garnered 23% overall but spiked among consultants (50%), likely reflecting their front-line view into operational turnarounds and restructuring.

Carve-outs held 15% across all respondents but saw significantly higher expectations from PE sponsors (25%) and corporate dev teams (17%)—suggesting that large corporates shedding non-core assets remain a fertile ground for dealmakers.

PE Sponsors Still Favor Traditional Paths

Interestingly, PE sponsors appear more anchored in traditional sourcing models. 50% of them still see bank-led auctions as the leading source, double the average across the entire survey pool. While this may reflect the scale and pace of capital deployment they require, it also hints at a growing gap between the sourcing strategies of sponsors versus advisors and operators.

Conclusion: Adaptability is the New Alpha

This snapshot of industry sentiment shows a clear bifurcation: while some dealmakers still lean heavily on legacy channels, others are quickly pivoting toward tech-forward and relationship-driven strategies. As sourcing channels diversify, firms that invest early in automation, AI-driven targeting, and founder engagement are likely to be better positioned in the race for quality assets.

Whether you're refining your own pipeline strategy or evaluating tools and partnerships, these insights underscore a simple truth: in today’s market, how you find deals is just as important as the deals you find.