3The Role of Investment Bankers
What role do investment bankers play in M&A?
Unless you went to school to study to become an investment banker, or you did a stint in investment banking as an intern or after college, you may have had little experience with them thus far. Sooner or later, you'll probably be pitched by one if you are doing well.
So, how do investment bankers play into M&A? When should you bring them into the deal? How do you pick one, and how much do they cost?
What Is an Investment Banker?
Investment bankers can do a lot of things in finance. They can act as financial advisors, prepare prospectuses, aid in US Securities and Exchange Commission (SEC) paperwork when filing for an IPO, and advise acquirers on the best ways to structure purchases of other companies, helping them find the money to do so.
When it comes to the sell side of M&A, investment bankers can help you value your company, advise you on terms and deal structures, negotiate on your behalf, and help pitch and sell your business to other companies.
In essence, an investment banker is like an agent or broker who matches buyers and sellers and financiers for corporations.
Good Cop, Bad Cop
Which cop is going to show up at your startup?
Like all salespeople, investment bankers often play good cop, bad cop. It often depends on their style and what they've been taught. Either way, their advice may not be wrong, but it may not always be offered in a style you are used to or receptive to.
They want ...
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