Unlike business brokers, investment bankers rarely act like real estate brokers. While a business broker focuses on simple marketing and one-off negotiations, an investment banker usually works to create a controlled auction between several large buyers simultaneously. Investment bankers and mergers and acquisitions advisors are well connected to corporate and institutional buyers, including strategic buyers, private equity firms, and family offices, while Mortgage Broker in Summerville SC are generally limited to buyers who are individuals. One of the main differences between hiring a business broker and an investment banker is the size of the company. While they may seem similar (and their titles are sometimes used interchangeably in the smaller segment of the market), business brokers and investment bankers vary widely in the experience and services they provide to business owners.
Most brokers charge between 10 and 12%, most investment banks use Lehman's double commission formula for success, which normally ranges from 3 to 6%, depending on the size of the deal (and in the case of Generational, the commitment fee is reimbursed from the success fee). While business brokers often rely on basic financial metrics, such as sales and profits, for valuation purposes, investment bankers use comprehensive methods that take into account several factors, such as intellectual property and future growth potential. Unlike business brokers, mergers and acquisitions bankers help prepare their clients' companies for sale and proactively position and promote their businesses to the decision makers of large private equity firms and large cap private equity firms. Most of the brokers and investment bankers I know will be happy to have a confidential, no-obligation call with you to talk at a high level about what they believe your company is worth, how your process works, and the expected fee. Business brokers tend to work with individuals or small groups, while investment bankers often work with large corporations or extremely wealthy individual investors.
When considering the sale of your company, you may consider hiring a business broker or investment banker. Therefore, you can see that there are substantial differences between a business broker and a mid-market investment bank such as Generational. The size of your company will determine whether you go to a business broker or investment banker.
