I found a fascinating study recently that caught my attention because the data was so compelling. According to the author, based on his survey of business owners that sold their businesses via an M&A advisory firm or investment bank, 100% felt that the advisor added value to their transaction, and 69% labeled it “significant.”
The study, conducted by Fairfield University professor Dr. Michael McDonald, surveyed 85 business owners who sold their businesses with the help of investment bankers for deals between $10 million and $250 million from 2011 to 2016. The findings were quite convincing. It is rare to find 100% of anything when it comes to any client/customer satisfaction survey.
We are often asked by business owners, “Why should I spend the money to hire you as my investment bank? My accountant says he knows lots of companies in my industry that would be interested in my business. My attorney has told me the same. Even my cousin Larry who worked for Boeing 30 years ago has offered to help me.”
Our answer is simple: You can certainly use these options - you may get very lucky and close a good deal. However, our process is based on providing Wall Street exit planning processes to Main Street businesses. For example, were you aware that Generational Group has more than 34,000 buyers registered in its database? I doubt your local accountant has that many buyers he or she can access!
Here are two other significant findings from Dr. McDonald’s study:
Both of these are valid findings. First, one of the cornerstones of the Generational Group M&A process is the creation of a limited auction. This means that we approach as many prime buyers who would have a strategic interest in your company as we can. From this group, we tap into and create interest in your opportunity with the hope of having 5, 10 or even 30 sign Non-disclosure agreements (NDAs) so that we can get as many offers as possible. This can often drive the value of the deal up.
But even more importantly, because buyers know how we operate, they generally assume that we are going to have multiple bidders for our clients, which leads them to often sweeten their offers in order to get a letter of intent (LOI) signed as quickly as possible. This illusion of a limited auction also drives up valuations.
The second finding above is equally important: You need to run your business while in market AS IF YOU’RE NOT GOING TO SELL. Why? Because you need to keep driving revenue, watching expenses, negotiating with clients, hiring talented folks, and ultimately ensuring that you are reaching your projected financial results in the fiscal year of your sale. The biggest deal killer we see happens when a seller advises a buyer in the 11th hour that the projected numbers are off YTD 15%. Not good.
So, hiring an investment bank like the Generational Group will allow you to run the company as you have been and ensure that your financial targets are not only met but exceeded. This is a vital benefit that can make a significant financial difference in your final payout.
Based on Dr. McDonald’s study, hiring a leading investment bank, like the Generational Group is well worth the investment. The really good news is that we were recognized as the Investment Banking Firm of the Year in 2016 by the M&A Advisor. In addition, we have won other awards throughout the years:
In addition to our awards, we have been one of the top ranked investment banks in terms of deals closed for the past several years:
So, if you want to experience what hundreds of business owners have, please reach out to us. We stand ready to duplicate the results from the study by Dr. McDonald and demonstrate a high level of value added to your transaction.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 Generational Equity, LLC. All Rights Reserved.
The information we learn from customers helps us personalize and continually improve your experience at gencm.com. Here are the types of information we gather.
Information You Give Us: We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice. Our computer system protects personal information using advanced firewall technology.
Information from Other Sources: For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Capital Markets LLC may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Capital Markets, L.L.C. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Capital Markets LLC at is office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
INFORMATION ON THIS WEB SITE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Capital Markets may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Capital Markets does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Capital Markets will be deemed NOT to be confidential. By sending Generational Capital Markets any information or material, you grant Generational Capital Markets an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Capital Markets is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Information Generational Capital Markets publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Capital Markets intends to announce such products, programs or services in your country. Consult a Generational Capital Markets representative for information regarding the products, programs and services which may be available to you.
Generational Capital Markets makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Capital Markets web site, please understand that it is independent from Generational Capital Markets, and that Generational Capital Markets has no control over the content on that web site. In addition, a link to a non-Generational Capital Markets web site does not mean that Generational Capital Markets endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Capital Markets BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Capital Markets.
Honored to win Investment Banking Firm of the Year 2 years running.
Over 50 awards and counting.
Sign up to receive regular email updates, industry-leading insights and details on complimentary M&A executive conferences in your area from our award-winning team
Success, you have been added to our list.