As a boutique investment bank, we are often asked to "pitch" our services to prospective clients as they try to figure out what firm to hire.
For a business owner contemplating hiring a middle market investment bank, selecting the most appropriate one for the specific situation is key. It could mean the difference between a failed versus successful deal. Or at a minimum, a poorly executed deal with a low valuation, troublesome terms or high cost of capital versus a well executed transaction.
A troubling issue is that most business owners do not maintain ongoing relationships with middle market investment bankers and will only work with that person once – on that owner’s deal. It is an important decision; a lot is riding on the transaction. How does a business owner select the right investment banker to represent his interests? In the following three part series, we pose questions each business owner should consider.
“Bulge Bracket” vs. Middle Market vs. Business Broker
Bulge Bracket generally refers to the large investment banks offering the full range of investment banking, sales and trading of securities, research, lending, market making and large distribution networks. Due to the minimum fees charged by Bulge Bracket firms, companies with less than $150-$200 million of revenue do not capture their attention.
Business Brokers generally represent sellers of “main street” businesses with revenues of up to $2-$3 million.
Middle-market investment banks fill the gap in between.
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