Deal Flow

Definition

Definition Deal flow refers to the pipeline of potential investments a manager evaluates. It includes sourced opportunities (proprietary outreach, networks, intermediaries), inbound opportunities, and situations discovered through research. Deal flow is not valuable by volume alone—allocators care about selectivity: whether the manager has enough quality opportunities to maintain discipline on price and structure. Allocator Context Allocators assess deal flow to understand whether performance is likely repeatable. A manager with limited deal flow may be forced into weaker deals to deploy capital, especially in larger funds. Institutions also evaluate how deal flow scales with fund size, and whether it depends heavily on a single relationship channel (raising key person risk). Decision Authority Deal flow strength influences committee comfort with capacity, fund size, and deployment pace. Weak or inconsistent deal flow often leads to reduced ticket size or “wait for more proof” decisions. Why Deal Flow Matters for Fundraising Managers that can demonstrate disciplined sourcing—what channels exist, what qualifies as “in-scope,” and what gets rejected—move through diligence faster. Overstating deal flow without evidence tends to backfire in IC discussions. Key Takeaways Quality and selectivity matter more than volume Scaling deal flow is a key capacity risk Weak flow increases drift and forced deployment risk Evidence-based sourcing stories build allocator trust