The phone rings. A big investment banking firm – a firm you’ve seen in the news – is on the line. They’re interested in managing the sale of your lower middle market business. It’s flattering. But why is a firm known for billion-dollar deals suddenly interested in you?
We’ve seen this before, big investment banks dabbling in markets they normally wouldn’t serve. Ask yourself what changed, your needs as a business owner or their need for new deals – any deals. Will they still be interested in your needs when the bigger market heats up? Will you get a firm’s Principal on the phone if things go sideways, or are you getting the B team? At SDR Ventures, we’ve guided owners of privately held, mid-market businesses through countless transactions. We pride ourselves on serving our clients’ best interests in any market condition.
There’s a particularly chilling line in this article, “Some banks are positioning the middle market as a way for younger bankers to prove themselves.” Would you accept less experienced surgeons looking to “prove themselves” with your open-heart surgery?
Nothing against the big firms for what they do: serve huge clients. They have the teams and tools in place to handle massive, international deals. But the way we see it, an investment banking firm isn’t a matter of name recognition, it’s about the right relationship and fit. You’ve put a lot of yourself into your business. When it’s time to step away, look beyond a big name and find the team that’s right for you.
Read the full Wall Street Journal article here.