Investment bankers help people buy and sell companies through the mergers and acquisitions (M&A) process. If you own a business and haven’t spoken with an investment banker before, you may not realize how they can help simplify the process for you.
CEOs who are selling a business for the first time, may also be unaware of the steps an experienced M&A expert takes to secure top dollar for a company. From the initial conversation through deal closing, investment bankers need to wear many hats to get the best deal for their clients.
Counselor. Successful investment bankers are active listeners who make a point to understand the business owner’s personal and financial goals regarding the sale of the company. This process of “getting to know you” and understanding your goals is critical, because it helps the banker develop the best marketing plan for selling the business.
Cat Herder. For sellers, the investment banker is their main point of contact before, during and after the sale; however, there are many other players behind the scenes. An effective investment banker must wrangle and manage a team of specialists including: research, marketing, legal, finance, tax, regulatory, wealth management. This helps ensure that the M&A process runs smoothly from start to finish.
Experienced Entrepreneur. Some of the best investment bankers have actually founded, run and sold their own businesses. They are experienced entrepreneurs who have walked in the business owner’s shoes, so they understand what the seller is going through and have experience in the M&A process from a personal point of view.
Lead Detective. A good investment banker leads a team that is constantly gathering information and looking for buyers that best fit the seller’s goals. The more quality buyers a business is presented to, the more likely the seller is to find a deal that meets their needs. This requires solid detective work (aka research) – whether it’s through searching their extensive buyer databases, networking at an industry conference or during a casual conversation with colleagues and friends. A good investment banker is always actively searching to add new buyers to the mix.
Global Insider. In today’s dynamic and global marketplace, business owners often find the best deals beyond domestic borders. Top investment banking firms have relationships with international advisory firms, which give their bankers access to international M&A experts across the globe. Investment bankers who have access to international buyers are equipped with tools to connect sellers with potential buyers who may reside in countries where economic conditions are better or where the seller’s service or technology is in higher demand.
Matchmaker. The M&A process is similar to dating, and a skilled investment banker will excel at facilitating a happy marriage between buyer and seller. He or she will research and evaluate buyers before presenting them to the seller and coach the seller on how to best approach meetings (dates) and negotiations with the seller. After several meetings and once a desirable match is chosen, the banker can mind the details necessary to get the deal (marriage) done.
Top Chef. The investment banker’s years of experience combined with their ability to cultivate just the right combination of ingredients (deal preparations and supporting players) typically adds up to a recipe for a successful deal. Sellers should seek out M&A professionals with a proven track record and the ability to offer expert advice during every step of the M&A process.
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