Essential Strategic Input For Management – Meet An Investment Bank

Essential Strategic Input For Management – Meet An Investment Bank

We are currently organizing a series of meetings involving some of our clients and some of the top investment banks in Boston. Let me explain what we are getting out of these meetings. But first a little history lesson.

Having worked in the investment banking industry in the 80s and 90s in London, I hadn’t realized how much the business has changed. Specialization was something I preached at the start of the boutique banking industry in the mid to late 80s. It was an obvious way for a small bank to differentiate their knowledge. But the depth of specialization these banks are achieving is very impressive. There’s no generalist in these banks. For example in one mid-sized investment bank (IB) the sectors covered included, Communications & Mobile Software, Cloud Infrastructure, IoT, and Big Data & Analytics. And they are busy closing transactions deep into these sectors, talking to all the key corporate development teams across the globe.

What can you expect to achieve from these meetings? 

I’ve listed the questions we are getting answered:

  1. Do people really understand your story and what you do?
  2. Is your business model attractive to investors and potential buyers now or later?
  3. Could a buyer easily integrate your technology into their business?
  4. What market sectors are regarded as dogs and which ones have massive potential through the lens of an acquirer in your space
  5. Where is your product on the product lifecycle curve, as viewed by outsiders?
  6. Are their niches you should be developing that large groups are struggling to penetrate?
  7. Could your cash flow and profit forecasting model withstand a 3 month due diligence process? Would you be constantly apologizing for optimistic forecasting?
  8. Are your markets big enough for you to scale and attractive to bigger brothers?
  9. Are your patents, legal contracts, accounting systems all up to date and in good order?
  10. What skills are scarce in the marketplace and therefore cherished by acquirers?
  11. Would an IB take you on today to sell you and if not why not?
  12. If an IB were handling your sale today, what would be their expectation of value?
  13. What demands would there be on the management team during a sales process?
  14. How long from start to finish does it take?

And what do the IBs get out of it? – In a word – pipeline. There are over 60 sell-side investment banks in Boston alone. There are never enough quality businesses to sell. IBs want a chance to get to know prospective clients, long before they sell them.

The Portfolio Partnership offers operational expertise to scale your business organically or by acquisition. We continue transform visions into remarkable businesses. Read about our approach in our complimentary white paper – Valuation Gaps & How To Close Them.

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