Deal Flow

What Is Deal Flow

Deal flow is a term utilized by investment bankers and venture capitalists to portray the rate at which business recommendations and investment pitches are being received.

As opposed to an inflexible quantitative measure, the rate of deal flow is to some degree qualitative and is intended to demonstrate whether business is positive or negative. The state of the economy impacts the level of deal flow. Economic expansion and robust equity markets will normally generate solid deal flow for most lenders, while a recession and sluggish equity markets might generate some deal flow for just the most settled players.

Understanding Deal Flow

Deal flow can be made out of a wide range of types of recommendations: venture funding, private situations, syndication, initial public offerings (IPO), mergers, and acquisitions. While large investment banks can handle the vast majority of these activities, specialist agents, for example, venture entrepreneurs and angel investors will generally zero in on deal flow just in their area of mastery.

While deal flow can be generated from several sources, the proposition that are probably going to earn the most consideration are the ones from companies or [entrepreneurs](/business person) where a previous investment has been fruitful, or where there is a strong existing relationship. Then again, unsolicited recommendations from untried elements are probably going to be given short confession by most settled lenders.

Illustration of Deal Flow

Deal flow frequently follows a cyclical pattern, and trends unfurl all through society and economic conditions. For instance, during the 1980s, "super advanced" industries taking on the beginning phases of digitization saw sound deal flow for inputs all over the supply chain. By the turn of the century, data innovations were extremely popular. Furthermore, by 2008, the Internet of Things was taking off, and today, SaaS (Software as a Service) appreciates undeniably more deal flow than hardware suppliers.

Later on, deal flow will follow where growth opportunities will come from, for example, artificial intelligence, proof based medication, and associated consumer gadgets.

Features

• Deal flow frequently follows a cyclical pattern, and trends unfurl all through society and economic conditions.
• Deal flow will in general be a qualitative measure, as opposed to a quantitative one.
• Deal flow alludes to the rate at which lenders receive pitches.