How to scale deal flow while maintaining an efficient budget

For lean private equity firms and family offices targeting the highly sought after $1 million to $10 million EBITDA segment, deal flow isn't just a challenge, it's the ultimate constraint on returns.

In the lower middle market, well-rounded deal sourcing separates the top performers from the rest. Yet, too many sophisticated investors are still playing a defensive game, relying on the same handful of bulge bracket and recognized regional M&A firms that every other serious buyer already covers. 

If you are only seeing deals from the "Top 100" investment banks in your sector, you are competing against your entire peer set from the opening bell. This reliance inevitably leads to fierce bidding wars, price inflation, and a perpetual race to the bottom on entry multiples. It's an unsustainable model.

The Hidden Value in the Fragmented Intermediary Market 

The truth is that the vast majority of promising $1 million to $10 million EBITDA businesses are not brought to market by the elite, specialized firms. Instead, they come from the thousands of long-tail investment banks, smaller regional boutiques, and generalist business brokers who quietly bring great opportunities to market.

These are the sources that your competitors are missing, either due to a lack of bandwidth or an unwillingness to invest in covering this specialized, fragmented segment. 

Our data show that the investment banking channel closes the most deals with private equity firms in the $50 - $250 million in enterprise value range. This channel is also incredibly resilient, even in challenging macroeconomic conditions. This is the hidden playing field where truly valuable deal flow resides.

Gaining consistent access to this network is not about luck; it is about establishing a disciplined, persistent coverage strategy that ensures your firm stays top-of-mind with thousands of intermediaries who might only bring one relevant deal to market per year. Missing even a handful of these contacts means missing high-quality, less broadly marketed deals. 

Scaling Coverage: The True Cost of In-House BD 

The immediate response for many investors is to task an existing team member or hire a new junior Business Development (BD) associate. However, a full-time BD hire is a significant, high-cost solution. 

Consider the fully-loaded annual cost of a new junior BD hire: 

• A base salary easily starting at $100,000 

• Benefits, payroll taxes, and training 

• A minimum of $20,000 to $30,000 in annual travel and entertainment (T&E) expenses to attend industry and regional events 

• The non-salary overhead, including software, desk space, and ramp-up time 

This rapidly pushes your annual investment in a single, unproven individual well over $150,000 before a single deal is sourced. For that price, you get one person with limited existing relationships and a lengthy ramp-up curve trying to cover a universe of tens of thousands of potential sources. 

Our Intermediary Coverage service is designed to bypass that steep cost and complexity. We offer your firm the reach of a seasoned BD team, constantly expanding your network for a fraction of the overhead of a single full-time employee. You gain immediate access to a proactive, tailored outreach system run by senior M&A professionals whose sole mission is to cultivate relationships across the entire long-tail market. Our dedicated team on average reaches 125 to 150 new sources of deal flow every year, consistently expanding your network and leveraging a comprehensive database of 13,000+ intermediary partners to ensure maximum coverage.