An investment banker:
- helps sellers identify and evaluate dozens of prospective companies to consider
- helps sellers get a good price for their company
- provides neutral expertise to help evaluate and mediate between varying opinions in the company’s leadership team
An experienced investment banker can also, importantly, help the business owner sort through a myriad of obstacles and challenges that commonly arise in the complexities of the sale process.
According to an angel investor with extensive experience in M&A, Basil Peters, the truly excellent investment banker will:
- shorten the time to exit
- save a transaction that otherwise would not have closed
- regularly increase the final selling price by 25-50% or more
(Peters: Early Exits)
There are several reasons the CEO/owner should not lead the exit process. In Peters’s words:
- “If there is ever a time the CEO/owner needs to be focused on the business it is in the months leading up to the exit. There are only a small number of CEO/owners who have enough experience with exit transactions to be good at them.
- The CEO/owner most often cares too much. At key points in the sale process, the selling team needs someone with a great deal of experience and just the right amount of dispassionate disinterest.
- One of the most detrimental conflicts can arise when a CEO leads the exit negotiations for their company, when the CEOs are on the one hand trying to do the very best job they can for their current shareholders, but on the other hand negotiating with individuals who will be the new shareholders, who determine the CEO’s salary and equity incentives.”
“One of the most important jobs of the advisor is to protect the CEO/owner, to the maximum extent possible, from the incredible burden of the exit transaction process” (Peters).