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How Investors Source Deals Without Relying on Brokers
How Elite Investors Build Deal Flow Without Brokers (And Find Value Where Others Don’t)
Investors, sponsors and family office members who want to source deals through relationships instead of relying only on brokers.
In their words
"The best deals I've found have been brought to me by friends or professional associates, not really by brokers."
"It's very useful to work with a broker the first time around."
"One thing you're working on right now, one thing you have a challenge with, and one thing that you're excited about."
What this talk covers
The best deals often come from friends and professional associates, not brokers. That was the view of several panelists at the Beverly Hills Investor Club Summit. One speaker called brokers table stakes and said they care about the deal happening because that is how they get paid. The moderator opened by asking whether investors should work a list of top brokers or let deals arrive through reputation.
The panel did not rule brokers out. One investor said a broker is useful the first time in a new industry or a new region, then the investor should build expertise in-house. Others pointed to personal relationships, giving a contact your best deal, and the 30-second update as better ways to earn trust. The moderator added that investors grow more selective as deal flow grows.
From the source
- The 30-second update has three parts: what you are working on, one challenge, and one thing you are excited about.
- One investor said a deal sent through a broker can reach 75 other people.
- The moderator's question asked about working a network of top 30 brokers and a universe of 50 to 100 assets.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: How Elite Investors Build Deal Flow Without Brokers (And Find Value Where Others Don’t). Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
5 key takeaways
- Brokers are table stakes. One speaker said brokers do not care about the people in a deal. They want the deal to happen because that is how they get paid.
- Use a broker to enter new markets. A broker can help the first time in an unfamiliar industry or a new geographic area. After that, the speaker said it is worth building the expertise and connections in-house.
- Personal relationships beat mass distribution. One investor said they only work with brokers they personally know. Otherwise a deal gets sent to 75 other people and the sender does not know what they are doing.
- Give someone your best deal. One speaker said the best way to build a lasting relationship is to help someone make money. They now offer their strongest company to a contact instead of giving every company a full demo day.
- Replace the elevator pitch. The 30-second update covers three things. These are what you are working on, one challenge, and one thing you are excited about. The speaker said it works in any room.
- 1Say what you are working on
- 2Share one current challenge
- 3Share one thing you are excited about
Related questions
- Which investor conferences are worth attending for fundraising?The conferences worth your time have real investors on stage, a team that has run many events, and plenty of time to meet people in person.
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
Questions about this video
Should investors rely on brokers for deal flow?
The panel said brokers are table stakes and not the best long-term strategy for repeat deals. One speaker said the best deals came from friends and professional associates.
When is a broker useful?
A broker can help the first time an investor enters a new industry or a new geographic area. As the investor learns the market, the speaker said it is worth developing the expertise and connections in-house.
What is the 30-second update?
It replaces the elevator pitch. The speaker said to share one thing you are working on, one challenge you have, and one thing you are excited about.
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