BUSINESS BROKERS, M&A ADVISORS, INVESTMENT BANKERS?
We often hear lower to middle-market business owners being confused whether to engage a Business Broker, M&A advisor, or Investment Banker. This is primarily due to being misinformed on the difference between the three.
- Work with smaller size businesses marketing to individual buyers.
- Revenue size less than $3 Million
- Valuation is usually based on discretionary income, sales,
- Operates on a regional and local scale
- Some may hold real estate licensure
- Typical fee is 12% of the transaction
M&A Advisors and Investment bankers (lower and middle market):
- Work with larger size businesses marketing to sophisticated investors. (i.e PEGs, CorpDevs, Family offices etc...)
- Revenue size between $3 Million up to $500 Million
- Investment bankers offer a broader range of services than M&A Advisors (i.e. IPO, Capital Raise, Valuation/Fairness of opinion etc...)
- Investment Bankers hold securities licenses such as series 79, series 63, and series 7.
- Unristricted operational scale
- M&A Advisors and Investment Bankers add value by providing strategic planning and consulting services
- M&A and Investment Bankers leverage technology and deep business relationships to market companies
- Valuation methods vary based on many factors
- Stringent due-diligence process and requirement of sophisticated technical abilities
- Transaction fees vary - standard is the standard Lehman formula