WHY HIRE AN M&A ADVISOR/INVESTMENT BANKER?
When meeting potential clients, we usually get the same questions: Why should I hire/need an M&A Advisor to sell my business or raise financing? Can’t I just do that by myself?
Of course, you can always sell on your own, but can you really spend a large amount of your time away from your operations towards this process?
You may sell on your own if you could spend 1000+ hours in research, market analysis, detailed financial projections, buyers vetting, marketing the deal etc…
We, at Envol Capital have been on the buy-side and thus have deep knowledge of valuation strategies buyers use, which sometimes do not always reflect your company’s fairest valuation.
Investment Bankers and M&A Advisors can add substantial value during acquisition and post-acquisition processes. Some benefit from hiring M&A Advisors are:
- Extensive experience in assisting companies buy and sell
- Knowledge of market trends and valuation methods
- Many have been entrepreneurs and walked in your shoes
- Access to investor groups that CEO/Founders would not
- Act as advocate in interviewing, negotiating, structuring the deal, and positioning the company prior and post-LOI
- Attract multiple prospective buyers giving you leverage in price bid.
Without qualified and experienced M&A Advisors, you could be leaving cash on the table. Let’s face it, a buyer will always try to buy at discount. By hiring an M&A Advisor you will be well prepared and equipped to face many hurdles.
Let me share with you my personal experience:
My first business transaction performed as a sole investor was to invest in a Best Western International hotel –the hotel was in need of restructuring. I spent a year and half working every single job from Housekeeping to Director of Finance to General Manager (for free) in order to see first-hand what the issues were, and to determine how to fix them. As the hotel’s rankings and reviews went up, we received a cash offer from a local investment group. Without considering engaging an M&A Advisor, we decided to do the deal on our own believing that the offer was great.
Upon exiting the hotel, I decided to go work in M&A and Private Equity consulting. During my time at these firms, I realized that my former partners and I left over $1.4M on the table when we exited our hotel. This experience is one of the many reasons we founded Envol Capital. Because our principals have entrepreneurial backgrounds, our firm ensures that clients get the fairest valuation for their businesses - to reflect the hard work they cultivated.
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