The Complete Guide to Selling a Business -How to Choose an M&A Advisor/Broker

Selling a business

Selling a business is a long and complex process. You may be ready to sell this year or just curious into what it will take to sell – this series will help. The business sale process can be broken down into core stages – from who you need to hire, to what questions you should be prepared to answer, to how to hand off your company once you’ve signed on the dotted line.

In this post, you will learn how to build an effective team to support the sale, because when it’s time to sell your business, don’t go it alone.

2. How to Choose an M&A Advisor

There is no perfect formula for choosing an M&A Advisor. You know you need an intermediary, but have not guide for navigating the process. The following scorecard can serve as a guide to help you make sense of cultural fit and indicators for future success before signing an agreement with an M&A advisor or broker.

                                        THE M&A ADVISOR/BROKER SCORECARD

Here are some questions to consider as you score each investment bank in the categories on the scorecard.

 ADVISORY PROFILE

 Industry Expertise

• How well does this group understand my business and the things that impact it on a daily basis?
• Have they ever successfully navigated a transaction in this industry in the past?

Advisory Style

• How appropriate is their engagement structure for my needs?
• How fair is their fee structure?
• How much time should I anticipate spending with this group per week?

Size / Turnover

• Does the team have high turnover or limited resources that might affect the success of the transaction?

Current and Historic Transactions

• What is the firm’s bandwidth to dedicate time/resources to my company, versus another client?
• How many transactions have they intermediated in the past and did those follow the proposed timeline?

ATTENDEE PROFILE

Level of Seniority

• Does the firm have a director-level member of the team to dedicate to my transaction?
• Will that person be the main point of contact moving forward?

Personal Experience

• Is the investment banker sitting across from me personally responsible for successful transactions, or speaking on behalf of the firm?
• How well does he or she provide anecdotal information about experience?

Number of Attendees

• How many people did they take out of the office to meet with me?

Competition / Market Leader?

• Has this firm ever worked with a company I compete with?
• How well-regarded are they among the other investment banks in their geography or industry?

POST-MEETING

Storytelling / Specificity

• How well does the firm understand my company’s story and both past and future plans?
• How confident do I feel that the firm is committed to our specific strategic initiatives? Individualization
• Did the bank specialize their outreach to me or address the executive team and me as a group?

Communication of Value-Add

• How well did the firm or banker communicate the services and value that would be delivered as a result of our exclusive engagement

 Timeliness of Communications

• How long after the meeting were next steps and expectations delivered back to me?

OTHER CONSIDERATIONS

Tone

• Did our two groups achieve peer-voice?
• Does their tone match mine during uncomfortable scenarios or questions?

Question Quality

• How strong were the questions they asked me?

 Response Quality

• How well did they answer the questions I asked?

Meeting Duration

• Was the firm respectful of my time and bandwidth?
• Were there inefficiencies before or during the meeting that would potentially be an annoyance or deterrence in the future?

Portions of this blog were taken from Axial Forum