“Proprietary deal flow” is mostly just code for “we knew a guy who wasn’t running a process… yet.”
Because the moment the owner tells their accountant, their mate on the golf course, or the bloke down the pub, the next call is to a banker. Then your “proprietary” deal becomes a 40-person data room, a management presentation with suspiciously perfect margins, and a deadline that turns grown adults into spreadsheet goblins.
The fun part is how firms talk about this like it’s a repeatable strategy. Reality is uglier. The average PE firm’s actual market coverage is tiny. One benchmarking stat put median coverage at 17.6% of relevant deal flow, with top quartile still only ~27.5%.  So most “proprietary” is just being early to an inevitable auction, not discovering Atlantis.
Home services is the clearest example. Every HVAC and roofing owner gets spammed daily by “partners” promising a quick close and a fair price. They ignore it until the business is big enough, the tax bill is annoying enough, and the founder is tired enough. Then they hire a banker and suddenly everyone has “a longstanding relationship”.
Real proprietary looks boring. It’s years of being useful before there’s a deal. Helping fix pricing, CRM, call conversion, dispatch, reviews, the stuff that actually drives EBITDA. When the sale process starts, it’s already too late to pretend you’re special.
Also, there’s roughly $2.184 trillion of global PE dry powder sitting around (Preqin via S&P Global MI). That’s a lot of capital chasing “off-market” fantasies.
