Making the decision to sell your business can feel like the highest professional hurdle you must clear. The truth is that the work is just beginning. You need a dedicated team of experts who can support you to sell your business for the highest possible price, at terms that are favorable. A great deal team needs an investment banker at its helm. Hereis how to find the right investment banker for your needs.
Know the Value of Experience
In your own business, there is no substitute for experience. That is true of every other company as well. What matters most is not generalized experience, though, but experience with your company type (i.e. privately held, lower-middle market)and the type of transaction you are pursuing. Ask about their experience, and get a list of references.
Ask People You Trust for Recommendations
The professionals you already know and trust—your wealth manager, accountant or attorney, fore xample—may have worked on other transactions before. Ask them whom they recommend. Then broaden your search to your professional network, especially to people who have recently completed successful sales.
Do not Obsess Over Firm Name
The biggest firms sink a lot of money into brand development. Your interest in a particular firm is testament to this branding. What matters most is not the firm, but the person in the firm with whom you will be working. Ask about who will oversee daily activities, and how much experience they have. You may get better results with a smaller firm that places you with a partner than a big-name firm that gives you a junior associate.
Do not Listen Only to the Person Who Tells You What You Want to Hear
It is tempting to promptly hire an investment banker who offers a great valuation and makes assertions that are not backed up by facts. Do not do this. You want a banker who can be honest with you, and who can assess your business fairly—both positive and negative. There is nothing inherently wrong with a high valuation, but if that is your primary reason for hiring a banker, know that this high valuation does not guarantee the final price. Indeed, a banker who sees your business through rose-colored glasses may be poorly equipped to help you realize value.
Know That Good Banks Might Say No
Good bankers are in high demand. They may have to decline your transaction for any number of reasons. Sometimes it is not a problem with the transaction. Instead, your business is just not a great fit for that bank. So, ask for feedback, as it may help you in narrowing your options and selecting the next banker.