I have spent the better part of a decade in investment banking and private equity (last three focused in MM PE investing).
One part of the job that I have enjoyed more than I expected was "sourcing". For those unfamiliar with it, this involves speaking with investment bankers on a regular basis to gauge their pipeline and reaching out directly to founders to see if they are interested in discussions to sell their business. I have had some luck there early on (sourced an add-on for one of our portfolio companies that we closed on and a platform investment that our fund went pretty far with).
I was wondering what folks would think if I went solo as a searcher offering the following two services to PE, VC and strategic / corporate buyers:
SaaS Platform (Lite): I would continue to call on bankers, research companies and contact founders and log notes, revenue figures, etc. and sell access to a database (I know there are services out there that - try to - do this)
SaaS Platform + Pipeline Management (Pro): Access to the SaaS platform plus I would create tailored email templates for clients and reach out on their behalf to prospective targets, track progress, liaise with the sellers.
#1 monetized through a monthly SaaS fee. #2 charge retainer to conduct outreach to desired universe of targets and a success fee (say 1% of transaction value if it closes).
I see a lot of value here being the "tip of the spear" and having good sourcing experience already under my belt. The upside in my mind is requesting co-invest alongside these buyers for deals that I find for them. The other opportunity I see is automating #1 and #2 and spending a good bit of time interviewing founders, bankers, etc. as a way to create content and drive traffic to the site.
Should I take the leap?
Yup, what Nick said. As long as your contract allows (or if it's open to interpretation), dip your toe in before quitting and going whole-hog on it.
This sounds like something you could (practically) dip your toe into without leaving your day job, right? Moonlight as a deal sourcer?
That would be the easiest way to validate whether or not there's demand for the service.
Obviously a lot depends on the terms of your employment contract. Even if it's grey area, though, the risk of fudging might be smaller than the risk of quitting the job wholesale to pursue an unproven business.
This comment was deleted 5 years ago