Deal flow from non-traditional channels

An owner is tired. The kids don't want the business. He hasn't called a banker or built a data room or decided on anything. He just mentions it over coffee to his accountant/lawyer/wealth advisor. That conversation happens long before any structured process does and it's where a lot of the best opportunities actually start. Plenty of deals still run through investment banks and the bigger the deal, the more likely it does. But this chart from Stanford's Search Fund Primer shows where deals come from by size and professional services firms are a source of transactions between $1M and $35M. The owner thinking about selling usually tells someone they trust first. So the real question for a buyer is how many people out there would think of you when that conversation happens. That's not a channel you can buy into. It's a network you build over time, an accountant here, a lawyer there, until enough people are looking out on your behalf. That's why I tell searchers and other buyers to yes, of course focus on the broker and banking networks but don't neglect other people who could be a great source of deal flow.