Sourcing Opportunities and Managing a Transaction

An investment process begins before a company is formally offered for sale. Investors form views about markets, build relationships, and identify circumstances in which ownership might change. Succession, corporate restructuring, a need for growth capital, and an existing owner's desire for liquidity can all create an opportunity.

Sourcing is valuable when it improves information or access. A long relationship may help an investor understand a founder's priorities and evaluate management. A sector thesis may identify a business before it attracts broad attention. Neither advantage makes price irrelevant. Exclusive access can still produce an unattractive acquisition if the buyer overestimates its ability to improve the company.