OffDeal uses AI agents to find potential acquisition targets

FIRST PASS

OffDeal raises $4.7M to build the future of M&A for SMBs (TechCrunch)

Y Combinator-backed startup OffDeal is leveraging AI to bring investment banking services to small businesses looking to sell.

Key points:

• Founded by former investment banker Ori Eldarov and ex-Meta engineer Alston Lin.

• The company uses AI agents to discover acquisition-ready small businesses, match them with buyers, & create pitch decks for targets.

• While the AI does the heavy lifting, human advisors remain the face of OffDeal's services.

• The company claims to have a database of 2M potential small business targets and is currently working with 9 institutional buyers, with 250+ more on a waitlist.

• OffDeal raised a $4.7M Seed round led by Radical Ventures.

Merlin’s Notes: As industry-specific AI co-pilots make their way across different industries, it was only a matter of time until someone did it for SMB business brokerage. As many of you can attest, dealing with certain brokers can be a nightmare and the space could use some professionalization.

For LMM PE focused on smaller buyouts, the obvious play here is to try out OffDeal’s services when their capacity increases or, more daringly, to build an internal system with similar capabilities.

While this sounds daunting, it’s not nearly as complicated or expensive as it sounds given that most PE firms already have access to mountains of data that can be put to incredible use.

TRENDS HIGHLIGHT

3 key trends in AI and Private Equity (PEI)

The private markets industry is increasingly embracing AI and other advanced technologies across various functions. Key trends include:

1. Growing use cases: 45% of European PE firms are using AI for value creation, with another 38% planning to do so by 2025. Applications range from market insights to financial management.

2. New investor pools: Advanced tech, including blockchain and tokenization, could help "democratize" private markets by enabling easier access for individual investors and wealth management teams.

3. Adoption challenges: Regulatory compliance, data security, and integration with existing workflows remain significant hurdles. 46% of firms cite the need to better understand workflows as the main reason for not implementing AI tools yet.

Merlin’s Notes: Another reason mentioned for the adoption challenges firms face is a lack of practical use cases for AI, and we’re not surprised by this.

This is what our conversations with PE leaders revealed and the main reason we started this series. We don’t think it’s as much a ‘lack’ of use cases as a lack of visibility into the right use cases.

We think PE professionals and firms need to develop AI literacy before they can start to wrap their heads around where the tech can add the most value.

JARGON BUSTER

USE CASE SPOTLIGHT

Building a CIM review workflow with Zapier + OpenAI

Shane Monastero and I made a quick video yesterday showing a relatively simple automated reporting workflow in Zapier (we're huge fans) and an OpenAI Assistant.

Here's an overview of the flow:

1. Send an email to a dedicated inbox →
2. Watch for attachments matching the set criteria →
3. Upload the attachment to Google Drive →
4. Upload the file to a vector store in OpenAI →
5. Send an instruction message to the Assistant →
6. Convert the Assistants' response from markdown to HTML using a Zapier Formatter step →
7. Create a new Google Doc with the formatted response →
8. Grab the sender's first name with a formatter step and create a new email to send the completed report back to the sender

It's a great flow for very specific document review tasks. Reply to this if you have any questions or want to see more like this!

TOOL OF THE WEEK

Otto

Otto, built by Cognosys, is a tool that lets you use AI agents within tables to automate hours of manual research in a few minutes.

Key features:

• List enrichment: Automatically add new data points to existing lists

• Web scraping: Simplifies web crawling with plain English commands

• AI research agent: Replaces manual research workflows

• Document processing: Quickly analyze hundreds of documents