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Evolution of PE Sourcing

Overview

How private equity deal sourcing has transformed from the late 1980s to the present — from ring binders and buy-side business brokers to CRMs, sell-side investment banks, and AI-augmented outreach. Glenn Oken provides a firsthand account spanning 35+ years.

Key Perspectives

  • Kate Hopkins traces the functional evolution of Portfolio Operations from pure value creation to a sourcing tool in Ep. 2. She observes that "increasingly, portfolio ops is not just about value creation. It's also about showing to attractive investments that you bring more than money to the table" — with investing partners applying growing pressure to demonstrate differentiated value to prospects. Kate also notes firms hiring portfolio ops professionals with revenue operations backgrounds, positioning them to bridge the ops-sourcing gap. Dan Herr confirms the trend, describing a "sourcing operations" role he created at Serent Capital modeled on RevOps, and Matt Rooney reports firms hiring people "not to find someone who's going to be out there hunting, but rather setting the rest of the team up for success in their sourcing efforts." (Ep. 2)

  • Dan Herr and Matt Rooney observe the compensation dimension of the sourcing function's maturation in Ep. 3. BD professional compensation is converging with deal-team compensation at equivalent seniority levels. Dan predicts that within five to ten years, the top-performing BD professionals will become the highest-paid people at private equity firms, driven by the increasing strategic importance of capital deployment. Matt notes from his recruiting practice at Coastal Partners that the trend is accelerating, with more firms offering carried interest and performance-based bonuses to BD professionals. Dan frames this as inevitable: "Go-to-market strategy for private equity firms is only increasing in importance," and the firms that build sophisticated, incentive-aligned sourcing teams will pull ahead competitively. (Ep. 3)

  • Bill Nunan offers the operator's view of PE's proliferation across a 20-year career in Ep. 5. He sums up PE in one word: "pervasive." When Bill started working 35 years ago, the PE model "was just sort of being developed" — he cites GTCR and Kohlberg & Company as inventors of the model. His first PE exposure came when Reynolds and Reynolds was taken private by Vista Equity Partners around 2006. Since then, he observes PE has "proliferated into sort of every vertical, every industry, every direction." Bill reports that sourcing volume to PE-backed CEOs has increased dramatically — he learns of a new firm "every single day" — but he has not seen a corresponding uptick in outreach quality, a gap he finds surprising given that "many of these companies own software businesses or other companies that are exceptional at marketing and driving conversion rates." (Ep. 5)

  • Dan Herr and Matt Rooney observe that the power dynamic between investment bankers and PE buyers has shifted significantly over the past decade in Ep. 6. Where bankers once relied on a spray-and-pray approach — sending deals to every buyer they could find — they have increasingly niched down by sector and moved toward fireside chats over broad auctions. Dan argues bankers' long-term positioning depends on becoming white-glove advisors for larger, more complex transactions while self-service platforms like Acquire.com (formerly MicroAcquire) absorb the long tail of smaller business sales. Meanwhile, technology is enabling select firms to see 80–90% of market transactions — though Dan notes "the average firm is nowhere near that." Matt attributes the growth of dedicated BD professionals in part to the proliferation of PE firms, which has forced buyers to build genuine relationships to earn deal access in a more crowded market. (Ep. 6)

  • Glenn Oken started in PE in 1989 when "virtually all deal flow" came from business brokers paid by buyers, not investment banks representing sellers. Brokers operated on trust and certainty of close, often showing deals to just 1-3 buyers. Today, buy-side brokerage is "still there, thank goodness, but it is the minority by meaningful measure." (Ep. 21)

  • Before CRMs, deal flow was logged in "a ring binder and sheets of paper." The team would "run over to look at the paper copy of a SIM and pour over it together." Glenn built his first CRM out of ACT. (Ep. 21)
  • Deals traded at 4-5x EBITDA in 1989 with significantly more leverage (sometimes 10% equity / 90% debt). Today, ~50/50 equity/debt is more normal. (Ep. 21)
  • The competitive landscape has transformed: family offices weren't active buyers in 1989; now they're significant competitors. The number of PE firms has exploded. (Ep. 21)

Episode Coverage

Episode Guest Angle
Ep. 2 Kate Hopkins Portfolio ops evolving from value creation function to sourcing tool; emergence of sourcing operations roles
Ep. 3 Dan Herr, Matt Rooney (hosts) Compensation convergence: BD comp approaching deal-team parity, prediction of BD as highest-paid role
Ep. 5 Bill Nunan Operator's 20-year view: PE as "pervasive," volume up but quality flat
Ep. 6 Dan Herr, Matt Rooney (hosts) Shifting banker-buyer power dynamics, future of investment banking, tech-enabled market visibility
Ep. 21 Glenn Oken 35-year firsthand perspective from 1989 to 2026