Stephen Madsen on how Private Equity firms can originate more deals

Introduction to Stephen

Stephen Madsen was the Director of Business Development & Capital Markets at Monomoy Capital Partners, a private investment firm with over $2.7 billion in assets under management. Monomoy invests in the equity and debt of manufacturing and distribution businesses that can benefit from operational and financial improvement. Stephen specializes in mergers & acquisitions, deal sourcing, private equity relationship management, and B2B relationship management.

What You Will Learn

The Rise in Deal Origination in Private Equity

Ways to Build a Deal Origination Team From Scratch

Why You Need to Take Notes in Private Equity

Breakdown

[00:47] Introducing Stephen Madsen

[03:48] Biggest Mistakes by PE Firms and Their Portfolio Companies

[06:59] Why Deal Origination is Such a Big Thing in Private Equity

[09:54] Should You Have a Separate Deal Origination Team?

[14:03] Benefits of Building a Standalone Business Development Team

[17:10] More Versus Less Information in Deal Origination

[21:26] Steps to Forming a Strong Intermediary Relationship 

[25:13] ROI on a Typical Business Development Relationship

[28:40] How to Measure the Success of Your Deal Origination Efforts

[33:10] Taking Notes and Why It's Important 

[35:50] Things That Define a Top Performing Individual 

[38:17] What Stephen Likes and Dislikes About Private Equity

[43:10] Parting Thoughts

What is Deal Origination in Private Equity? 

Deal origination in private equity refers to the process of identifying, sourcing, and evaluating potential investment opportunities in private companies. This typically involves a combination of market research, networking, and outreach to entrepreneurs and business owners. The goal is to find businesses with attractive growth potential, strong management teams, and clear pathways to generating returns for investors. According to Stephen, deal origination is a key component of a private equity firm's investment strategy, as it helps them identify and secure attractive investment opportunities.

Why You Need to Have Intermediary Relationships in Private Equity 

Intermediary relationships in private equity are important because they provide access to a wider pool of investment opportunities. Stephen explains that they also help build a strong network of contacts. Intermediaries often have deep connections within the business community and can help private equity investors identify attractive investment opportunities they may have yet to be aware of. Additionally, these relationships can provide valuable insight into industries, market trends, and other factors that can impact investment decisions. Stephen believes these types of relationships can make or break the chances of a PE firm achieving long-term success. 

How to Reach Tim

Stephen's LinkedIn

Monomoy Capital Partners

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