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What is a proprietary deal?

Glossary term · Updated

Answer in brief

A proprietary deal is an investment opportunity a firm pursues directly with a company or owner, outside a broad auction run by an intermediary. The appeal is less competition and more time to build trust with the seller. In a CRM, it is a source type, and firms need a shared rule for when a deal still counts as proprietary.

What a proprietary deal means in practice

In practice, "proprietary" covers a range. At one end, the firm found the company, built the relationship and is the only buyer in conversation. At the other, a banker shows the company to a few firms before a formal process. Many teams call that second case "pre-emptive" or "limited process" rather than proprietary.

Proprietary deals usually come from long-running relationships with founders, operating partners, lawyers and accountants, or from systematic outreach to companies that fit the thesis. They take patience. A founder may take years to decide to sell, and the firm that kept in touch is the one that gets the call.

Illustration: A growth equity team meets the founder of a software company at an industry dinner. They stay in touch for two years, sharing introductions to potential customers. When the founder decides to take outside capital, she calls them first and they negotiate terms before any banker is hired. That is a proprietary deal.

How a proprietary deal shows up in a CRM

Record it as a source type on the deal, with a small, fixed picklist: proprietary, limited process, broad auction. Pair it with a source contact so you know whose relationship produced it. Useful reports include the share of the pipeline that is proprietary, conversion by source type and the relationships behind proprietary deals.

Proprietary sourcing depends on knowing early that a company exists and who can reach it. Private companies raising money in the US often file a Form D notice with the SEC after their first sale of securities, and those notices are public. Whatever the source of an early lead, log it against the company record with the date you first saw it, so the team can later show how long the relationship ran before a deal. Canteris, which publishes this reference, flags filings and market events that touch companies in the firm's book and finds warm paths through existing contacts.

Questions & answers

Are proprietary deals cheaper?

Sometimes, because there are fewer bidders, but not always. Sellers in direct talks often have advisers and a clear view of value. The more reliable benefit is time and access.

Is a deal still proprietary if a banker is involved?

It depends on your firm's rule. Many teams treat a sell-side adviser running a limited process as a separate category. Pick a rule and apply it consistently.

How should a CRM track proprietary deals?

Use a fixed source type picklist on each deal, link the source contact, and report on conversion and pipeline share by source type.

Sources for this entry

  • SEC: Filing a Form D noticeExplains Form D notices, filed within 15 days after the first sale in an exempt offering.
  • CanterisSupports the description of Canteris flagging market events and finding warm paths.

Continue this reading path

  1. Private equity deal sourcingPrivate equity deal sourcing combines a clear thesis, intermediary coverage, proprietary outreach and public signals, measured from your own CRM data.
  2. Deal flow (definition)Deal flow is the stream of opportunities a private equity firm sees, from first contact to a decision. What it means and how a CRM should record it.
  3. Warm introductionA warm introduction is a connection made through someone both sides trust. Why deal teams rely on them and how a CRM finds and records warm paths.
  4. Market signals for deal teamsMarket signals for deal teams include SEC filings, insider trades, ownership stakes, cash runway, catalysts, IPO filings and first Form D raises.
  5. Relationship intelligenceRelationship intelligence shows who at your firm knows whom, how recently they spoke and the warmest path into a company, built from email and calendar data.

Cite this entry

Private Equity CRM. “Proprietary deal.” Canteris Reference, published by Canteris. Updated . https://privateequitycrm.com/glossary/proprietary-deal/