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Is Your Investment Banker Willing To L.E.A.R.N.?

Don't settle when selling your company. Meet with and interview multiple bankers who are willing to hear what you have to say.
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A skilled investment banker has the ability to market your company. They will contact the right buyers in the right markets, and use the right information to maximize your company’s value and meet your personal and financial goals.

To achieve this perfect scenario, your investment banker needs five skills that are honed to perfection. In short, they must be able to L.E.A.R.N.

L - Listen- A wise investment banker knows to listen to their client and to prospective buyers. He or she must determine why the client wants to sell the business. This includes an assessment of the client’s personal and financial priorities and goals, as well as pricing. Advisors can then use this information to craft a transaction that meets the client’s goals, especially by listening to prospective buyers and determining if the buyer is a fit for the seller and the goals of both parties align.

E - Educate- A thorough investment banker must educate a business owner about the lifecycle of the sale. This includes: how long the sales process will take, how to prepare for the sale, questions to expect, how to manage employee/stakeholder expectations, and the importance of staying engaged in the business during the sale. An educated owner is not surprised when snafus arise, but is able to stay focused on the end goal.

A - Auction - A savvy investment banker will market the company and conduct a silent auction to maximize the value of the client’s company. Having multiple potential buyers enhances the value of the company and provides leverage to secure terms that match the owner’s personal and financial goals.

R - Research - An experienced banker realizes that research is the key that unlocks the true value of any company. The work results not only in identifying potential buyers, but also in determining industry pricing trends, in creating a world class marketing piece about the company, and in structuring the deal to minimize taxes and maximize value.  

N - Network - More an attribute than a skill, a well-connected banker has an established network of potential buyers that extends beyond local, regional or even national borders. He or she has the ability to tap into a worldwide network of potential buyers and other investment firms that enhances the ability to not just get the deal done, but to get a deal done that exceeds the client’s expectations. If the local market for a company is soft, the demand for that same company may be high in another region or another country. Look for a banker who has easy access to an established, worldwide network of buyers.

The banker you select must be able to L.E.A.R.N. They must realize that only when they: listen carefully, educate owners proactively, auction the company efficiently, properlyconduct research and network globally, will they be able to sell most effectively.

Don’t settle when selling your company. Meet with and interview multiple bankers. Ask direct questions about the process they will use to sell your company. If they are not willing to LEARN, continue your search for a banker who will.

Last updated: Jan 17, 2014

DAVID MAHMOOD

David Mahmood created and sold seven different businesses before founding Allegiance Capital in 1998, which provides mergers and acquisitions financial services to middle market business owners.




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