Crack the Deal Origination Code: 4 tips to help you close more deals, faster

I have one piece of advice: before agreeing to a meeting, always check the time zone you will be in. I didn't…and that's how I ended up dialling into a webinar at 3am!

And not just any webinar: “Crack the Deal Origination Code” with Sourcescrub. 

Our headline presenter was Timm Overmans. With a 15-year career spanning firms like Constellation Software (CSI), BID Equity, Visma and Everfield, Timm is one of Europe's most experienced software M&A originators. You can get in touch with Timm on [email protected]

In the webinar, we covered these 4 key topics:

1. What standout deal sourcers have in common

2. What good origination KPIs look like

3. How to maximise cold outreach response rate

4. How much time does one get to nurture leads

Access the full recording here and the summary below. 

Many thanks to Sourcescrub for their continued support to Rollupeurope and the serial acquirer community!  

What standout deal sourcers have in common

CSI's incredible success has captivated investor interest: 70 new software serial acquirers have been founded since 2020 (serial acquirer database). Some are “bootstrapped”, however most are under pressure to deploy capital. The upshot is that business owners are swamped with unsolicited, mostly mass-produced inbounds. No wonder: the cost to compile, research and contact a prospect list has tumbled thanks to AI. 

What does it take for your pitch to stand out?

In Timm's view, these four qualities:

• Statistically, good sales people perform well. Increasingly, we see recruiters and b2b SaaS BDRs being hired into origination roles - and succeed 

• Perseverance and frustration tolerance. It can take years to close prospects (more on that below)

• Not overselling / not talking too much. The first 1-2 calls are always about the seller - not the buyer. What is their story? What are their pain points? What matters to them in a sale, besides price? 

• Not overload the seller with information requests. Ask for minimal information upfront in a standardised way, but be consistent with communicated timelines and hand over to the execution team for valuation discussions

Pro tip: in every single interaction with the seller, play back what they told you. Be specific on your investment thesis, and why their business is the one you need.  

Generic aggregators over-hire and later over-fire.  

Generic aggregators overpay for deals. 

Generic aggregators waste everyone's time. 

Key takeaway: don't be generic.      

What good origination KPIs look like

CSI's rule of thumb is that 200-250 interactions will convert into 1 closed transaction. Experienced originators close at least a deal a year. 

How does one get there? 

CSI wants you to book 10 substantial calls with decision makers, per week. Top originators can manage double that. Key to their productivity is high outreach conversion. In Timm's experience:

• Undifferentiated, mass emails get <5% response rate

• 25% response is considered good for a generalist acquirer

• Customised scripts coming from thematic serial acquirers (e.g. PE buy and build) can result in response rate as high as 80-90%

How to maximise cold outreach response rate

Once again: be specific. 

Example of a good outreach email or call: “Hello, my name is X and we are building the market leader in Y. Having completed X acquisitions over the past 12 months, we are looking at your company as the final piece of the puzzle. Here are the reasons we would love to own your businesses, and what we could achieve together…” 

How much time does one get to nurture leads

In Timm's experience, in Europe it takes 1 year from the sell signal to closing. If that sounds like a long time, consider that the CSI norm from the first call to closing is 3 years. Some prospects take as long as 10 years. 

Knowing that it takes 18 to 24 months to build a deal pipeline, and armed with high level funnel assumptions, you can calculate how many originators you need in place today.