Sourcing Cadence & Pipeline Management

Successful M&A programs don't rely on luck—they build systematic sourcing engines that generate consistent, high-quality deal flow. This requires disciplined cadences for target identification, outreach, relationship building, and pipeline management.

Why Sourcing Cadence Matters

Reactive vs. Proactive Sourcing

The Sourcing Funnel

Universe (10,000+)
        ↓
Target List (200-500)
        ↓
Outreach (100-200/quarter)
        ↓
Meetings (30-50/quarter)
        ↓
Active Pipeline (10-20)
        ↓
LOI Signed (5-8/year)
        ↓
Closed Deals (2-4/year)

CONVERSION RATE: 1-2% from outreach to close

The Sourcing Cadence Framework

Quarterly: Target List Development

Timing: First 2 weeks of each quarter

Process

1. Review Strategic Priorities - Align target criteria with corporate strategy
2. Market Mapping - Identify companies in priority sectors/geographies
3. Screening & Scoring - Apply filters (size, growth, fit) and rank targets
4. Prioritization - Create A/B/C tiers based on strategic fit and feasibility
5. Research - Build target profiles for top 50-100 companies

Output: Prioritized target list of 50-100 companies per quarter (200-400 annually)

Target List Template

Weekly: Outreach & Engagement

Timing: Every Monday morning

Activity Goals

• 10-20 new outreach contacts initiated (emails, calls, LinkedIn)
• 5-10 follow-ups with warm leads
• 2-4 meetings booked for coming weeks
• 1-2 in-person meetings with targets or intermediaries

Monday Outreach Session (2 hours blocked)

1. Review target list for the week (10-15 companies)
2. Customize outreach templates
3. Send introduction emails
4. LinkedIn connection requests
5. Follow up on prior outreach
6. Log all activity in CRM

Outreach Metrics to Track

• Contacts attempted: 10-20/week (500-1,000/year)
• Response rate: 30-40% (aim for 300-400 responses/year)
• Meetings booked: 2-4/week (100-200/year)
• Conversion to active pipeline: 5-10% (50-100 active opportunities over time)

Daily: Pipeline Management

Timing: End of each day (15 min)

Activities

• Update deal status in CRM/pipeline tracker
• Log conversations and next steps
• Set follow-up reminders
• Flag deals needing escalation or resources
• Prepare for next day's meetings

Pipeline States

Sourcing Strategies

1. Outbound Direct Outreach

When to Use: High-priority strategic targets

Approach

• Identify decision-maker (CEO, founder, board member)
• Research thoroughly (company, individual, recent news)
• Craft personalized message highlighting strategic fit
• Use warm introduction when possible
• Follow up 2-3 times if no response

Email Template: CEO Outreach

Subject: Exploring Partnership Between [Acquirer] & [Target]

Hi [CEO Name],

I'm [Your Name], [Title] at [Acquirer Company]. We're the [market position]
in [industry], serving [customer description] with [key products/services].

I've been impressed by [Target]'s growth in [specific area] and your
leadership in [specific achievement]. We see strong strategic alignment in:

• [Specific synergy #1 - be concrete]
• [Specific synergy #2 - be concrete]
• [Specific synergy #3 - be concrete]

Would you be open to an exploratory conversation about how our companies
might work together? I'm happy to share more about our vision for [market/
technology/geography] and learn about your plans.

Available for a call next week if you're interested.

Best,
[Your Name]
[Title]
[Phone]

Response Rates

• Cold outreach: 10-20%
• Warm introduction: 40-60%
• Conference follow-up: 50-70%

2. Banker & Advisor Relationships

When to Use: Continuous inbound deal flow

Approach

• Establish relationships with 10-20 key M&A advisors
• Meet quarterly to share strategic priorities
• Respond quickly to inbound opportunities
• Provide feedback on deals (even passes)
• Build reputation as serious, fair buyer

Banker Meeting Cadence

Key Bankers to Cultivate

• Sector-specialist boutiques (e.g., Guggenheim for tech, Evercore for healthcare)
• Large banks with M&A practices (Goldman, JPM, Lazard, Qatalyst)
• Regional banks in key geographies
• Industry-specific advisors

3. Conference & Event Networking

When to Use: Building long-term relationships, market intelligence

Approach

• Attend 2-4 industry conferences per year
• Pre-schedule meetings with target companies
• Speak on panels to raise profile
• Host dinners or receptions for targets
• Follow up within 48 hours post-event

Conference Playbook

Pre-Event (2-4 weeks before)

• Review attendee list, identify 20-30 target companies
• Send meeting requests to CEOs/founders
• Book 8-12 formal meetings (30 min each)
• Plan informal networking (happy hours, dinners)

During Event

• Execute scheduled meetings with target discussion guide
• Attend keynotes and panels (take notes on market trends)
• Network in hallways, receptions (collect 20+ business cards)
• Host dinner for 6-8 target companies

Post-Event (within 1 week)

• Send follow-up emails to all contacts within 48 hours
• Log all conversations in CRM with next steps
• Share market intelligence with team
• Schedule follow-up calls with top 5-10 prospects

ROI of Conferences

• Cost: $5K-$15K per conference (travel, tickets, dinners)
• Outcome: 10-15 new relationships, 3-5 active conversations, 1-2 LOIs per year
• Payback: One deal sourced from conferences justifies 5+ years of attendance

4. Board & Investor Network

When to Use: Proprietary deals, warm introductions

Approach

• Brief board members on M&A priorities quarterly
• Request introductions to portfolio companies or relationships
• Leverage investors' networks (PE firms, VCs)
• Attend investor events and conferences
• Build relationships with VCs in target sectors

Board Engagement Template

BOARD M&A PRIORITIES UPDATE

Our M&A focus areas for [Year]:
1. [Priority #1: e.g., AI/ML capabilities in B2B SaaS]
2. [Priority #2: e.g., European market expansion in fintech]
3. [Priority #3: e.g., Cybersecurity portfolio fill-in]

IDEAL TARGET PROFILE:
• Revenue: $20-100M
• Growth: >30% YoY
• Margin: >20% EBITDA
• Customer overlap: Enterprise B2B

REQUESTS FOR BOARD:
• Introductions to companies fitting this profile
• Feedback on targets we're tracking
• Market intelligence on competitive M&A

Typical Board Network Yield

• 5-person board → 50-100 portfolio companies/relationships each
• 250-500 potential targets accessible via warm intro
• 10-20 introductions per year
• 2-4 deals sourced via board network annually

5. Proprietary Research & Signals

When to Use: Identifying emerging opportunities early

Signals to Monitor

• Funding events - Companies raising growth equity may sell in 18-24 months
• Leadership changes - New CEO often brings M&A openness
• Product launches - Signals strategic direction and capabilities
• Customer wins - Indicates market traction and validation
• Partnerships - May signal financial stress or need for exit
• Geographic expansion - Could indicate ambitious plans or overextension

Tools & Sources

• CorpDev.Ai (AI-powered target monitoring and intelligence)
• Crunchbase, PitchBook (funding and M&A data)
• LinkedIn (leadership changes, employee growth)
• Company blogs and press releases (product updates)
• Trade publications (industry news)
• Customer review sites (G2, Capterra - market positioning)

Research Cadence

• Weekly: Scan funding announcements for priority sectors
• Monthly: Review target list for signals (leadership, funding, news)
• Quarterly: Deep research on top 20-30 targets

Pipeline Management Best Practices

Weekly Pipeline Scrub

Timing: Friday afternoon (60 min)

Process

1. Review all active deals (10-20 in pipeline)
2. Update status and next steps
3. Identify stalled deals (no progress in 30 days)
4. Make kill/accelerate decisions
5. Assign follow-up actions for next week

Pipeline Health Metrics

Kill Criteria

Be ruthless about killing deals that don't meet criteria:

Kill If:

• ❌ Strategic fit has deteriorated
• ❌ Valuation expectations >30% above your range
• ❌ Financial performance declining
• ❌ Key customer concentration risk discovered
• ❌ Seller not serious (slow responses, changing terms)
• ❌ Diligence red flags (accounting, legal, customers)
• ❌ Internal alignment lost (sponsor left company, priorities shifted)

Kill Decisively

• Document reason for kill in CRM
• Communicate to seller if appropriate ("not the right fit at this time")
• Stay warm for future (market conditions, seller expectations may change)
• Review kills quarterly to identify patterns

Acceleration Criteria

Accelerate If:

• ✅ Strong strategic and financial fit
• ✅ Valuation in acceptable range
• ✅ Seller motivated and responsive
• ✅ Competitive threat (others circling)
• ✅ Window of opportunity closing
• ✅ Internal champion and alignment

Acceleration Tactics

• Escalate to SVP/CEO for senior engagement
• Accelerate diligence (bring in consultants, add resources)
• Pre-wire IC for faster approval
• Offer exclusivity or expedited timeline
• Increase outreach frequency (weekly → 2-3x per week)

CRM & Pipeline Tracking

Pipeline Tracker Requirements

Must-Have Fields

• Company name, sector, geography
• Revenue, EBITDA, growth rate
• Contact information (CEO, CFO, banker)
• Stage in pipeline
• Last contact date and next action
• Strategic fit score (1-5)
• Valuation expectations vs. range
• Key deal champion (internal)
• Notes/history log

Sample Pipeline Tracker

CRM Platforms for M&A

Spreadsheet-Based (for small teams 1-2 FTE)

• Pros: Free, simple, customizable
• Cons: No automation, no collaboration features, manual updates
• Best for: <50 active targets, simple workflows

Dedicated M&A CRM (for mid-sized teams 3-5 FTE)

• Options: CorpDev.Ai, DealCloud, Affinity, SourceScrub
• Pros: M&A-specific features, relationship mapping, automation
• Cons: $25K-$100K annually (traditional tools), implementation effort
• Best for: >100 active targets, multiple team members, complex workflows

General CRM Adapted (for teams with existing CRM)

• Options: Salesforce, HubSpot (customized for M&A)
• Pros: Leverage existing platform, integrated with other tools
• Cons: Requires customization, not M&A-optimized
• Best for: Companies with enterprise CRM already deployed

Sourcing Metrics & KPIs

Leading Indicators (Activities)

Lagging Indicators (Outcomes)

Conversion Metrics

Sourcing Playbook by Deal Type

Bolt-On Acquisitions ($10-50M)

Target Profile: Smaller companies in adjacent markets, product line fill-ins

Sourcing Strategy

• Direct outreach to founders/CEOs (less likely to hire banker)
• Conference networking
• Referrals from customers and partners
• Monitor funding events (companies that raise $5-15M may sell in 12-18 months)

Cadence: 50-100 outreach/quarter → 10-20 meetings → 3-5 active pipeline → 1-2 LOIs/year

Platform Acquisitions ($100-500M)

Target Profile: Market leaders, transformational deals

Sourcing Strategy

• Banker relationships (most will run sale process)
• Board introductions
• Long-term relationship building (may take 12-24 months)
• Competitive intelligence (monitor who's likely to sell)

Cadence: 10-20 outreach/quarter → 5-10 meetings → 2-4 active pipeline → 1 LOI every 12-18 months

Tuck-In / Acqui-Hires ($5-20M)

Target Profile: Small companies, primarily for talent or technology

Sourcing Strategy

• Founder networks and accelerators
• VC referrals (companies not succeeding but have valuable assets)
• LinkedIn talent mapping
• Shutdown/distressed company monitoring

Cadence: 20-40 outreach/quarter → 10-15 meetings → 5-8 active → 2-3 LOIs/year

Sourcing Cadence Template

Sample Quarter Plan

Q1 Sourcing Goals

• Develop target list: 100 companies (40 A-tier, 40 B-tier, 20 C-tier)
• Outreach: 150 new contacts
• Meetings: 30 initial conversations
• Pipeline adds: 10 new active opportunities
• LOIs: 1-2 signed

Weekly Schedule

Monthly Reviews

• Week 1: Target list refresh, add 10-20 new companies
• Week 2: Pipeline health review with VP/SVP, kill stalled deals
• Week 3: Banker meetings (2-3 check-ins)
• Week 4: Month-end reporting, plan next month

Common Sourcing Mistakes

❌ Mistake 1: No Systematic Outreach

Problem: Waiting for deals to come to you

Solution: Block 2 hours every Monday for outreach, track activity metrics

❌ Mistake 2: Spray-and-Pray

Problem: Mass emailing 1,000 companies with generic message

Solution: Target top 100, personalize each message, focus on quality over quantity

❌ Mistake 3: Not Killing Fast Enough

Problem: Pipeline clogged with 30+ low-probability deals

Solution: Weekly scrub, kill 50-60% of opportunities, keep only best fits

❌ Mistake 4: Ignoring Conversion Metrics

Problem: Lots of activity but no deals

Solution: Track conversion rates at each stage, optimize bottlenecks

❌ Mistake 5: One-and-Done Follow-Up

Problem: Send one email, give up if no response

Solution: Follow up 2-3 times over 4-6 weeks, try different channels (email, LinkedIn, phone)

Key Takeaways

1. Systematic sourcing beats reactive - weekly cadence generates 10x more deal flow than waiting for bankers
2. Funnel math is predictable - 150 outreach → 30 meetings → 10 pipeline → 2 LOIs → 1 close
3. Quality over quantity - 20 meetings with perfect-fit targets > 100 meetings with mediocre fits
4. Kill ruthlessly - keep only 10-20 active deals, accelerate or kill the rest
5. Track conversion rates - identify bottlenecks (low response rate? poor meeting→pipeline conversion?)
6. Leverage multiple channels - direct outreach, bankers, conferences, board network
7. CRM is critical - can't manage 100+ targets in your head, need system
8. Be patient - average time from first contact to close is 12-18 months for large deals

Related Resources

• M&A Operations Overview - Operating systems for corp dev functions
• Meeting Cadence & Governance - Weekly/monthly meeting rhythms
• Reporting & Metrics - Dashboards and KPIs for sourcing
• Building an M&A Pipeline - Pipeline development strategies
• Target Identification & Sourcing - Detailed target sourcing process