Key Considerations When Choosing an Investment Banker

Selling the company you’ve spent years building is a major decision, and often an unfamiliar process for most sellers. Typically, business owners hire an investment banker at the outset of their contemplated sale process to guide them and help keep the transaction workload manageable. What many sellers don’t realize, though, is that the decision of who to hire to represent your company is almost as important as who you end up selling to. Investment bankers can affect the outcome of the transaction in a myriad of ways. Below, we’ve shared a few considerations sellers should keep in mind when interviewing potential investment bankers.

Role in the Transaction

This is vital for sellers looking to understand how involved the investment banker will be, beyond just crafting a list of potential buyers and reaching out to them.

  • Will they act as the primary point of contact for all of your other advisors involved (such as your legal team, tax specialists, and wealth advisors)?
  • Can they make recommendations for these advisors if you don’t already have them engaged?
  • Will they take a proactive approach to vetting buyers, separating the serious, credible buyers from opportunistic or unlikely-to-close parties?
  • Will they be guiding you through the process from the beginning, including how much and when to share confidential information with prospective buyers?

Ask for a transaction timeline mapped out by key milestones of the sale process. This will help you not only understand the overall process but will also give insight into their level of involvement at each stage. Most sellers seek an investment banker to lead the sale process rather than play a supporting role; confirming these expectations up front will prevent any surprises as you travel the transaction road together.

Experience & Track Record

Often, investment bankers can provide benchmarks for transactions similar to yours. These can include, for example, valuation expectations or specific diligence requests that may be asked of you. Given that most sellers are doing this for the first time, it is important to find an investment banker that can provide the most relevant guidance to you and your company.

  • Does the investment banker have experience with transactions in your industry?
  • Ask for a “football field” range of potential value and understand what considerations will determine whether buyers steer toward the lower or upper ends of the range. Feel free to get specific here: ask what metrics of the company potential buyers will be most focused on and what methodologies they are likely to use to triangulate around a purchase price.

Equally important as this guidance is the accuracy of what the investment banker is telling you. Ask for examples of three recent transactions to understand how closely the ultimate purchase price at which each of those companies transacted aligned with the ‘football field’ range the investment banker presented when pitching for the engagement. Be wary of an investment banker that pitches a high valuation range that appears out of line with other investment bankers’ views and who can’t substantiate a track record of closing within the pitch range. The most credible investment bankers will set realistic expectations and be careful not to overpromise.


Relationships are everything in a sale process. Any investment banker can assemble a list of potential buyers and reach out to them on a seller’s behalf. The most impactful investment bankers will already have a keen sense for who the right buyers are (particularly strategic buyers) and have some prior relationship with them.

  • How well does each investment bank you interview actually know the most likely buyers for your business?
  • How willing are they to bring those relationships to the table, when needed?
  • Is your investment banker willing to bring in other partners at the firm who might have closer buyer relationships? Some investment banks have “sharp elbows” internally and teams can be reluctant to bring others into a deal for fear of needing to share fees.

Ask for a preliminary buyers list to understand the likely quantity and fit of parties to be approached as well as the investment banker’s depth of relationships (keeping in mind that greater quantity is not always the right strategy).

Firm Support

Not every bank operates the same way, and buyers who don’t dig into the details of the internal workings may find themselves working with completely different team members as the deal goes on, or feeling like less of a priority. As part of your interviews, as bankers how they will staff your engagement; who will be on the team and what roles will each person play? How many other engagements will key members of the team be working on simultaneously? Find out how much partner attention you’ll receive, beyond the pitch stage.


Hiring an investment banker is expensive. There are different ways fees can be structured, which can get complex quickly and make the true cost difficult to understand upfront. In some cases, costs could be incurred even if the company doesn’t ultimately sell. You should have a firm grasp of the cost structure prior to choosing an investment banker, ensuring the value you’re getting from the investment banker aligns with the cost. As the old saying goes, you get what you pay for. A high-quality investment banker that identifies the right buyer for your company at the highest price, will more than pay for themselves even if their fee is the highest.


We believe transparency is key in all aspects of a transaction process; this includes your relationship with your chosen investment banker. Provide prospective investment bankers with robust information and data about your company in advance of their pitch and determine who spends the time to really get underneath the business through analysis, thoughtful questions, and outside research. Assess who goes above and beyond in their efforts to understand the company; you need to be comfortable that they can represent the company to potential buyers in an accurate manner.

Be transparent and candid with yourself and your investment banker regarding challenges in the business. Credible buyers won’t expect a perfect company but being upfront about the challenges the business is facing will likely help the most credible buyers get comfortable with the company and increase certainty of closing. The good and the bad will come out during the buyer diligence stage – it is better to disclose potential issues proactively to avoid surprises or drastic changes, starting with your investment banker.

Similarly, expect transparency in return. Ask potential investment bankers what they see as the most significant challenges to a successful sale process. The best investment bankers will have candid and measured feedback regarding likely areas of concern for prospective buyers and considerations relevant to the current M&A market.

Lastly, make sure to perform reference checks with 2-3 prior clients. Undoubtedly, the references provided will be positive (or else they wouldn’t offer up those names) but try to focus in on areas where the investment banker fell short. No investment banker is perfect so try to extract some common themes around areas where they could have improved.

The investment banker you choose will impact all aspects of your sale – from the potential buyers you meet to the negotiation of terms. It is important to be thoughtful when choosing to whom you entrust this important process. As you interview prospective investment bankers, ensure you understand the process itself, their level of involvement, and how well their experience and resources align with your goals.