How to Choose an M&A Advisor
The hardest part is over: You have grown your business, and now, you’re determining your exit. But who should you choose to find a buyer and get you through the arduous process? The first step is finding someone you can trust to help you navigate the sale.
In today’s blog post, let’s discuss five things to keep in mind as you choose an M&A advisor.
1. Broker vs. Advisor
You might have heard the term “broker” before, but did you know these professionals tend to represent small, local companies with revenue under 2 million dollars or handle much larger sales (over 250 million dollars)? If your company is somewhere in the middle, a broker would not be the best fit.
M&A advisors, however, represent sellers with revenue between 2 and 250 million dollars who are hoping to find multiple buyers for their companies. This range is considered the lower to middle market of the transaction continuum – and it’s the area that we specialize in at Athena M&A.
2. Understanding Your Company’s Value
Before you begin the marketing process, it’s important to understand the value of your company through the lens of the current market. Many sellers will either overestimate their value or have very little idea of what it is at all. At Athena M&A, we offer a free market valuation before we even sign an agreement. This step ensures that we are all in agreement of what the market value is likely to be and makes sure our clients have clear expectations.
Be aware that some advisors will inflate this value in hopes of earning your business. Down the line, when potential buyers present their offers, they will often be more in line with what we have shared.
3. Communication
There are advisory groups who will introduce you to a different advisor for different stages of your transaction. It’s important to know exactly who you will be working with, as it’s a very long process!
At Athena M&A, the person that you talk with is your advisor for the entire process. Sure, we have support from our team members, but your primary point of contact is the person that you choose. Having a strong, continuous communication with one of us from beginning to end is a key to our success.
The sale process involves many difficult and important decisions. You’ll want to be sure that you are comfortable discussing these points with your advisor and that their experience will provide the clarity you need. A good advisor will work well beyond the letter of intent or offer letter and help you navigate through the diligence phase to closing. It may be a bumpy ride, but a good advisor can help steer clear of many of the challenges.
4. Buyer Pool
Some advisors represent a single buyer, so there is no guarantee that you will get the best offer. When it’s time for you to choose who will buy your company, you should be presented with multiple offers so that you can decide based on not only the best financial offer but the strongest cultural fit too. A skilled advisor has a qualified buyer pool to access during your selling process to help provide choice and strengthen the possibility of closing.
5. Primary Contact
Make sure you understand who you’ll be working with throughout the selling process. Some M&A firms will start you off with the advisor that you chose but then pass you off to a junior assistant or other managing directors for different parts of the process.
At Athena M&A, you will work with the same advisor from the time you first connect to the time you close. We believe that the relationship with our sellers is key to a successful transaction, and the more time we spend with them, the more we learn and can represent their best interests.
There are several options when it comes to choosing an M&A advisor.
By understanding the space and knowing your options, you’re in the driver’s seat. It’s important to find an advisor who will listen to your concerns, be involved from start to finish, and help you navigate this tricky process.
The team at Athena M&A has years of experience – not only in the M&A space but as owners and operators in business too. We understand the dedication and passion it takes to grow your business as well as the importance of a smooth exit. Contact us today to get started.