These slides are from a webinar hosted by Navatar and featuring Exit Strategies. Watch full webinar here: http://www.navatargroup.com/Best-Practices-for-Proprietary-Deal-Sourcing.php Watch this recorded webinar by Exit Strategies, a buy side deal origination firm, as they discuss the psychology of approaching business owners, and the tactics to establishing a successful relationship. Topics include: - First impressions – do not approach a business owner like you would an intermediary! - Timing – the optimal window of engagement - Process – how to build an effective origination strategy - Discipline – bring the same rigor and structure to origination as due diligence - Pipeline - how a broad bandwidth of deal pipelining improves opportunity quality

1. Webinar: Don’t Lose The Deal –
Proprietary Psychology is Different

2. Exit Strategies is a buy side deal origination firm that:
• Focuses on the middle market
• Represents a diverse spectrum of investors & capitalization methods
• Employs proprietary tools and process to create profitable deals not just introductions
• Focus’ on the distinct psychological nuances of originating proprietary deal
About Exit Strategies

3. Today’s Presenters
Jordan Wagner
JordanistheCo-Founder ofExit
Strategies andthemanagerof
deal development. Jordanfocuses
ontheidentifying targetsand
matching with theright private
equityclient.
Allan Siegert
Allan serves asVPSales for
Navatar. He isaveteran in
Financial Services saleswith
morethantwo decadesof
experience inSaaS, financial
marketdata,tradingroom
systems, CRM andfinancial
news.
EdHarms
EdHarms is thedirector ofsales at
Exit Strategies.Ed was the
founderandowner of Selling
Excellence, anational saleand
marketing consultancy. Edhas
conductedseminars nationwide
andmadepresentations toover
50,000people duringhis career.
Mark Wagner
MarkisthePresident &CEO ofExit
Strategies. Markspentthelast twenty five
years asmanaging partneratoneofLong
Islandsfastestgrowing midmarket
accountingfirms.He currently owns Paypro,
oneofthenations largestindependent,
privately heldpayroll providers. Mark has
participated inover ahundred
mergers/acquisitions and turnarounds.

4. Proprietary Deal Advantages:
• Collaborative engagement with ownership
• Minimal competition
• Greater access to unique, meaningful insights
• Value on terms/buy
• No auction with associated upward price pressure

5. Proprietary Deal Challenges:
• Extensive education of principals often required
• Deal packaging usually primitive
• Identifying and waiting for optimal window of
engagement
• Sellers can be easily overwhelmed/not prepared for
data request
• Usually a marathon not a sprint

6. Optimal Proprietary Deal Flow Demands
• Process orientation
• Timing Sophistication
• Discipline (bias for exclusion)
• A Unique Psychological Approach

7. Process Orientation
Bringing the same rigor & structure to
origination that Private Equities bring
to due diligence.

8. Timing Sophistication
Opportunity pipelining
Developing an opportunity until it’s
deal ready.
– The optimal window of engagement
– Deal flow predictability
– Compressed cycle from full engagement to resolution

9. Discipline
A bias against immature opportunities ,
forced fits, weak positions….

10. A Unique Psychological Approach
• Building a deal vs. Bidding on one
• Not an interrogation! /”You called me!”
• Understanding ownership ’s position &
desires
• Educate then create momentum

11. Supporting Process, Timing,
Discipline & Psychology :
• Classification systems
• Opportunity management protocols by class
• Customized rules of engagement
• Rigorous internal investment review
• Pre engagement briefing of the PE

12. Challenges of Developing a
Deal Origination Engine
• Engine must be managed like a business in
itself
• Highly collaborative relationship with
origination enterprise (in house or
outsourced)
• Create and produce a proprietary opportunity
language
• Detailed definition of investment targets –
Focused target easier to see and hit

13. Focusing on a Space Improves
Deal Quality Over Time
• Focusing OnASpace Improves Deal Quality Over Time
• Creates predictable deal flow
• Unique presence in sector for PE, creates relationships with many owners
• Provides important competitive intelligence
• Increased credibility in the add on search space
• Allows business owners to WANT to do a deal with you, rather than bidding war
• Understand your competition (strategic buyers, etc)

14. Design Considerations for Your
Origination Search
• Create a large enough target list (200 companies)
• Create a strong narrative and reason why you are in this space
• Create a presence in industry (trade shows, industry associations etc)
• Have the man power
• Give as much as you take
• Stay organized and track results
• Know how to identify strong and weak industries and when to end searches

15. The Role of Metrics in a Search: An Example
• 1000 companies contacted
• 50% are not interested
• 10% have institutional investors
• 25% do not respond
• 10% have interest on some level
• 5% have some level immediate interest (50 companies)
• Of these 50 companies, most will be too small.
• Usually 5-10 platform opportunities.

16. Why Outsourcing Makes Sense
• Puts full time focus on origination
• Allows PE to focus on actionable deals
• Receives in the trenches feedback
• Insures continuity of origination
• Cost savings

17. Questions?
To learn more about Navatar’s deal management
solutions, please contactAllan Siegert.
Email: asiegert@navatargroup.com
Phone: 212-863-9655 ext. 7473
To learn more about Exit Strategies, please
contact Jordan Wagner.
Email: jwagner@exitllc.com
Phone: (702) 538-7088

18. Thank You