loader image
CRE Insights Blog

Deal Flow Multipliers

I recently gave a 30 minute talk on Deal Flow Multipliers, ways that family offices and investment firms can attract much more deal flow than they are currently. We have found several strategic ways to consistently attract more qualified deal flow, and we know from working with our 1,500 registered family offices and 20 families worth $100M or more each that those with the most volume of, most exclusive, best priced, or most strategic deal flow win over the long-term. Hello, this is Richard Wilson with the Family Office Club. And I want to talk to you about deal flow multipliers. What I’m finding very consistently is that single-family offices are not in the business of investing in manufacturing, or investing in health care, or investing in private equity. They’re in the business of positioning themselves and marketing themselves as an investor in healthcare, or manufacturing, or whatever their niche is. The reason why I make this differentiation is that when you are trying to invest as a family office, the more high-quality deal flow you can get access to, the better deals you can complete. Because the deals that you consider to be your top 1% of deals are going to be far higher quality if you see 40 deals a month versus 40 a year. One of my friends sold his company to a publicly-traded company, and he said, “Wow, I, I’ve got a ton of deal flow. Since I’ve sold, I’ve probably seen 40 deals.” Meanwhile, I know that some days we get sent well over 40 deals. So I think that the positioning aspects are very important. And if you look at a piece of deal flow, and you equate it to giving someone a fish, and you say that a family office goes around saying, “Hey, does anyone have any manufacturing fish? Does anyone have any healthcare fish?” and they’re asking only for directly what they want from their direct relationships, you don’t have a lot of leverage. It’s not as effective. You don’t get as much deal flow. If you instead, look at this fishing game, this deal flow game and think about how to set up fishing nets, how to have other people fishing for you, how to set up a dam in front of a river that’s going to capture the energy there of deal flow, and position your family office so it attracts deal flow very consistently, then you can do much better. The difference is going to one person who gets a lot of manufacturing deal flow, and asking them to keep you in mind versus speaking at a manufacturing conference full of manufacturers, and you’re the only family office speaking, saying that you’re looking to connect with CEOs who would like an investor on their cap table that could be strategic or be on the board of the manufacturing firm and take them places they haven’t gone yet because of your firm’s background in investing in exiting manufacturing companies. That’s the example of building a fishing net or building your positioning versus asking someone for fish. Also, the difference is, instead of as asking somebody for deal flow, you could be naming your family office off of the type of deal flow you want to attract most. If you’re the ABC Family Office, no one knows what to keep you in mind for unless ABC is the actual industry you’re focused on, the type of investments you make, the structure you use. So, it’s very important to be top of mind and first in mind if you want superior deal flow. The family offices who get the most deal flow, exclusive deal flow, or see deals first are the ones who are going to win the investment game over the long run, because there’s compound interest in getting the best deals at the best prices over a long period of time. This is Richard Wilson, coming to you from Mayfair just outside of downtown London today. Thanks for joining me and we’ll see at one of our live events.

About the author

Richard Wilson