4 Ways to Source Acquisition Targets

Welcome to another edition of The Wise Exit newsletter! This week, we're covering:

• 4 ways to source acquisition targets (and which works best)

• 5 strategic questions to sharpen your buy-side approach

• 3 practical action steps to start building real deal pipeline

Let’s dive in.

💡 One Big Idea

The 4 Ways to Source Acquisition Targets (And Which Works Best)

If you're thinking about growing your business through acquisition, there's a harsh truth you need to hear:

The best deals don’t usually come through your inbox.

Sure, you could sit back and wait for a banker to bring you something. Or maybe a retiring competitor will give you a call one day. But by the time an opportunity like that hits your radar, it’s probably already hit dozens of others, too.

Which means you're already behind.

So when it comes to sourcing acquisition targets, there are really only 4 ways to go about it:

1. Inbound:

This is the most passive route. You sit back and wait to hear about a seller, banker, or advisor bringing a deal to market. It’s easy on your time, but the deal quality is hit-or-miss, and the competition is usually higher.

2. Hire a Buy-Side Broker: 

You pay someone to go drum up opportunities for you. It saves you time but comes with limitations like boilerplate outreach, low personalization, and often lots of noise. It can be a useful lever, but it rarely delivers proprietary deals.

3. Outbound Targeting:

You build a clear acquisition thesis, define your ideal target profile, and start reaching out to business owners directly. This is where the work starts, but it’s also where quality targets show up.

4. Build Your Own In-House Pipeline: 

This is the PE playbook. Build a list of high-fit companies, cultivate relationships long before anyone is ready to sell, invest in those conversations, and become the buyer they call first when they are.

In our experience, outbound and in-house sourcing is where the best (and most proprietary) deals come from.

Yes, they take a bit longer. But they also give you:

• Time to build trust with sellers

• Less competition at the table

• More insight before diligence even begins

So if you’re serious about buying a company to grow your own, start building your pipeline today. You don’t need a massive M&A team, just a clear strategy and consistent outreach plan. 

Reach out if you have any questions or need help with this.

5 Key Questions to Ask Yourself Today 

1️⃣ Have I clearly defined the type of company that would be a strategic fit for our business?

2️⃣ Am I relying too much on inbound deal flow or opportunistic offers?

3️⃣ Who on my team owns our acquisition strategy and pipeline development?

4️⃣ If I had to name 10 targets today, could I?

5️⃣ What have I done in the past 90 days to build a real relationship with a potential seller?

3 Action Items For This Week

☑️ Create your ideal acquisition profile: Revenue range, EBITDA, geography, owner type, strategic fit. Write it all down.

☑️ Block 60 minutes for research: List 10 potential targets in your industry or geography.

☑️ Reach out to one owner this week: Even if it’s just to introduce yourself and get on their radar.

That's all for this week.

If you're considering acquisitions as part of your exit or growth strategy and want help building a playbook, just reply to this email or contact us here.

Until next time,

Brian Dukes
Managing Partner at Exitwise