Five Factors to Consider When Interviewing an M&A Advisor

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Five Factors to Consider When Interviewing an M&A Advisor

When you undertake a merger or acquisition, you’re basically taking on another full-time job. If you’re like most business owners, you likely already work long and hard hours, and just don’t have the time you need to devote your full attention to the sale. A DIY approach is almost always a bad idea because there are many complex moving parts associated with the sale of even smaller businesses. An M&A advisor can help you shepherd the transaction along, support negotiations, and even ensure you get the most favorable deal terms. As an objective outsider, your advisor also brings significant wisdom and experience to the transaction. This can help you better prepare for the deal, ultimately resulting in a higher sale price. 

Finding the right M&A advisor begins with interviewing several options. Here are some factors to weigh as you interview applicants. 


Experience is probably the single best predictor of success. The right M&A advisor is one with significant expertise in your industry. This enables them to understand key business drivers, unique market dynamics, and potential buyers. Ask about how many deals they have closed, how long closing took, and what roadblocks they encountered. Then verify their claims by calling references. 


In some ways, hiring an advisor is a bit like dating. After all, you’re going to be spending a lot of time with this person, and you’re putting yourself into a position of vulnerability by agreeing to hire them. You need to trust that this person has your best interests at heart. Do you feel comfortable working with them? Do you think they will follow up on their promises. Trust your gut here. This is a relationship you may have for months or years. 


Who will be doing the daily wok on your account. Make sure you meet each member of the deal team, and have a clear understanding of who will be running the deal. Ask about how much time and attention you can expect from partners as opposed to junior members of the team, and ensure you’re comfortable that you’re paying for skilled team members, not entry-level beginners. 


How will the advisory team run the process? An expert M&A consultant has a lot of discipline. They see the deal through to completion without rushing things or cutting corners. They’ll also be honest about how long the process might take, and what you can do to speed it along. The sale process is a cooperative endeavor, not something you can hand over to your advisor and ignore. Honest advisors will tell you exactly what the transaction needs from you to succeed. 


Fees are an important consideration, but don’t focus on a single number. Instead, look at the overall value the advisor brings to the transaction. The best M&A advisors typically charge the bulk of their fees as a commission, not as a retainer. So ask about fee structure and assess the advisor’s ability to offset this fee by conferring additional value on the transaction. 

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