Everyone’s chasing the same deals. That’s the reality in 2025, especially in the lower middle market (LMM), where private equity firms, search funds, and independent sponsors are all fishing in a tighter pond. With deal competition at an all-time high and quality targets harder to come by, the ability to generate proprietary deal flow has become the ultimate differentiator.

But what exactly does "proprietary" mean in practice?

It’s not about exclusivity in a legal sense. It’s about access. The investors who consistently close deals are the ones who’re talking to founders before they’ve hired an investment banker, before the teaser is blasted out to 200 firms, and before the valuation gets inflated in a competitive auction.

1. Why Proprietary = Premium (Without Paying Premiums)

Sourcing a deal directly gives you a head start. You can shape the conversation, understand the seller’s true motivations, and often sidestep a bidding war entirely. That early positioning can lead to better deal terms, quicker closings, and stronger relationships post-close.

2. The Old Way Doesn’t Work Anymore

Relying on referrals and broker emails used to work when there were fewer buyers and more deals. But now? Your inbox is full of over-shopped deals. Everyone saw it. Everyone passed. You need to be upstream—before a deal becomes "public."

3. How Tech is Changing the Game

Proprietary deal sourcing at scale used to be impossible. But platforms like OutSearched are making it efficient and affordable. By automating outreach across email, phone, and direct mail, OutSearched connects investors with high-intent, off-market sellers. Dozens of them, every month.

4. It’s Not Just for Big Firms Anymore

Whether you're a solo GP, an independent sponsor, or a $500M PE fund, proprietary deal flow is now accessible. OutSearched’s model, which is 1/8th the cost of traditional referral-based sourcing, levels the playing field.

Key Takeaway:

If you want to stand out as a buyer in the LMM, you need to stop reacting and start sourcing. Proprietary deal flow isn’t just a nice-to-have. It’s the edge that separates the firms closing deals from the ones chasing them.

The secret weapon? A system that gets you in the room before the competition even knows there’s a room.