Sam Mielke lives in New York City and is 25 years old. He graduated from a large public university, in the US midwest, and started his career at a tiny Minneapolis boutique investment bank (Northborne Partners) that you’ve never heard of. This year he’s in line to make a $2mn bonus by selling perhaps a dozen companies with the help of AI. In the process, he may just be reshaping a Wall Street industry defined by elite gatekeeping and a rigid hierarchy that he explicitly resents and has apparently overcome.
Since early this year, Mielke has been a Managing Director at OffDeal, which describes itself as “the world’s first AI native investment bank”, and one that aspires to be what to be what it calls “the Goldman Sachs for SMBs”. OffDeal this week announced it had raised $12mn in a Series A round led by Toronto’s Radical Ventures, a financing that values the company at around $100mn.
MainFT has written recently about the likes of Rogo (IB chatbot) and Mosaic (automated LBO models) as examples of the many workflow tools now being debuted to make life easier for junior analysts.
OffDeal, however, imagines what happens if you use the latest in generative and agentic AI to just fully jettison most of the humans on a traditional 4 or 5-person deal team, leaving someone like Sam Mielke to solely undertake the remaining interesting, highest value-add human tasks of deal execution, afterwards cleaning up on the disproportionate amount of the economics created.
OffDeal is the brainchild of Ori Eldarov, 32, who spent six years at RBC in New York and London before enrolling at Harvard Business School in 2021 where he wanted to come out with a tech start-up idea.
The totem pole in investment banking — analyst, associate, vice-president, director, managing director — he told me created the wrong incentives for efficiency, particularly among the middle layers who were invariably forced into playing politics to justify their existence. And so Offdeal was envisioned, in part, to be the tech solution to this inherent “cultural” problem in investment banking.
“I came up with a crazy idea, like, “[w]hat if I just start my own investment bank? Like, what if I just built a de novo bank from scratch … my own software, my own org structure, my own data, my own bankers … a fully vertically integrated kind of approach”, Eldarov said.
Offdeal does one and only one very specific investment banking activity: sell-side M&A. The good news is that selling companies is, in large part, a very specific set of discrete administrative or mechanical tasks. The handful of cognitive or human elements, however, are crucial for a positive outcome and the client, who is in middle of life-changing liquidity event, believe that they deserve flawless execution on all of it.
The OffDeal workflow
Offdeal has started out targeting companies with revenue between $10mn and $100mn and Ebitda between $1mn and $10mn — a modest size that even middle market specialist firm would not regularly service given the typical fee structure that a legacy banking deal team requires. Offdeal clients so far include a paving company, an HVAC servicer, a waste management hauler, and a Pickleball court operator.
“The unit economics don’t stretch to long tail of market,” said Ryan Shannon, who had previously worked at Barclays and TPG before joining Radical Ventures, the VC firm that has now twice backed OffDeal.
Yet what is arguably the most important task in sell-side M&A — curating the appropriate set of potential buyers who will submit bids to support a heated auction — is hardest for smaller companies since that universe is beyond any single banker’s knowledge.
“It felt like an unsolvable problem,” said Shannon.
Offdeal’s other co-founder is Alston Lin, formerly an engineer at Meta, then built a model to scrape millions of US business websites and online records to create a detailed index of companies complete with financial and demographic data. That roster could then be used to both pitch potential but also come up with lists of the best potential buyers for “Bob, The Roofer in Boise, Idaho”, as Eldarov put it.
One OffDeal client, Steve Barnes, told Alphaville that Offdeal located a buyer for his Arizona Montessori school that eventually paid a price 40 per cent more than what his personal original outreach efforts yielded.
But after process of locating the buyer universe, the bankers have to manage the sometimes overwhelming logistics of the deal day-to-day. Offdeal has then built the software to automatically create the one-page promotional “teaser” sent to potential buyers, the database to track non-disclosure agreements sent to the parties who want access to both an electronic data room and the full company information memorandum, which the latter itself can also be automatically produced by the Offdeal AI machine. Offdeal also automates, via email, most interactions with bidders.
“Yes, you’re spending hundreds of dollars or thousands of dollars in compute but, guess what, it’s still cheaper today than the banker’s time,” Eldarov explained.
One of OffDeal dashboards
The latest money raised is in part to keep building the various models underlying the different sell-side workstreams so they can be fully integrated into a CRM (customer relationship management software) and take advantage of all the new data that is constantly being created by every new deal.
“Building any CRM is hard especially with the data model that can handle the complexity of seller and buyer, and the adviser and the portfolio company, and all these different entities to make sure that the data flows and that tracks the follow-up tasks and nothing so cracks,” he said.
If the tech works, there could be at least two big implications.
First, Offdeal should be a machine. The firm so far closed or close to closing around 10 deals with fewer than 10 employees total of which three are bankers. By the end of 2027, Offdeal wants $100mn in annual run-rate revenue on 100 deals. OffDeal bankers are supposed to shoulder seven to 10 deals at a time, with the goal of its AI-facilitated sale process to take just four months, start to finish, on average (Offdeal bankers are not travelling to the client’s office, not usually joining due diligence visits or calls and relying on lawyers to deal with the letter of intent and purchase agreements). Offdeal charges a flat success rate of 5 per cent but with no upfront retainer.
One founder trying to disrupt another part of professional services told Alphaville that he was sceptical that OffDeal could work at scale — smaller companies were just messier and deals were more likely to go sideways or become quagmires. Still, a $100mn revenue traditional investment would have an operating margin of roughly 25 per cent (60 per cent comp ratio and 15 per cent non-comp expenses) and a valuation of perhaps $500mn. Elderov said OffDeal would be worth at least $1bn with its higher profit margins, growth profile and the asset value of its tech stack.
Second, bankers like Mielke, ready or not, are going to be left to spend most of their time on the fun part of the job. Mielke told me he is working 60 to 80 hours a week drumming up competitive tension in auctions and helping companies evaluate bids, the latter which can be a complicated task with buyers putting up different financing terms and forms of consideration.
For example, Barnes, the Montessori school owner who worked directly with Eldorav, in addition to all the technology Offdeal used, said he got “white glove” service from his banker and that he was calling Eldorav at all hours as the auction reached its peak. For his part, Eldorav described the banker’s job as “part-time therapist”.
Offdeal pays its bankers a $100k base salary. Mielke’s anticipated $2mn bonus comes from a fixed 20 per cent cut of each deal fee he is responsible (20 per cent of the 5 per cent firm deal fee means 1 per cent of each transaction equals the banker bonus).
Offdeal has posted a job listing for more bankers with hundreds of CVs coming in, many from the brand-name Wall Street houses it says, the kinds Mielke does not hail from. He described the investment banking “target school” approach where firms take most members of their trainee classes from a small set of universities as “ridiculous” and “absurd” and said he been closely studying the HR startup, Meritfirst, founded by Joe Lonsdale and Sam Lessin, which is focused “building Meritocratic Infrastructure”.
As it turns out, Mielke has found the meritocratic job he wanted all along which comes with both personal vindication and the accompanying pay structure.