The 5 Key Considerations for Choosing an Investment Banker

How do you feel when someone tries selling a business to you even without having the competency to do so? Well, it does take a lot of effort to find the so-called “chosen one” to do the right task for you. To choose the right investment banker is an extremely daunting task. However, having the right candidate can ease the process effortlessly.

An investment banker is a professional who is finesse at his job, have extensive investment banking knowledge, and can add value to a sale process in varied ways. The first and foremost nature one can recognize in an investment banker is that with the level of experience achieved he is able to elucidate any problem that is out of the norm.

Generally, the act of such an attitude is what indicates the buyers that you’re serious about the talks you’ve delivered. This in return demonstrates that the investment banker is extremely good at his job.  Beyond this, a top-notch investment banker must have the zeal to tackle any problems that fall in his way.

Besides this, the presence of an investment banker can boost the sale activity and enhance business credibility. These experts can play the role of a middle man and ease off the burden from business owner by conversing with the buyer quoting the best price and terms. Great investment bankers carry a skill that will drive competitive bidding tensions between buyers, this is done by publicizing the auction process or simply subtly giving a hint that there are pending offers as well.

Many professionals have an illusion that being an investment banker is an easy task. But they are wrong, the only way one can value the job responsibility is by acquiring investment banking knowledge.

Several business graduates want to work in an investment banking firm but tend to freeze during interviews when questioned of common technical questions. Getting skilled and gaining experience in investment banking is not a walk in the park. If you’re not ready with such kind of questions or unaware of what it takes to become an investment banker, then it is high time that one needs to undertake investment banking credentials.

Ideally, when selecting an investment banking professional or a team, these are the key factors one should keep in mind during hiring:

  • Preparation and enthusiasm

The preparation, does it match the story? Is the bank already working with any one of your competitors

  • The credentials, capabilities, and experience

It is crucial to understand the kind of team or professional you’re hiring. Is he skilled enough to take up responsibilities? Who will lead the equity capital market?

  • Execution strategy

Are the senior level managers willing to attend drafting sessions, organizational meetings or other key meetings? What kind of process does the bank follow regarding pricing shares? What are the strategies that the bank follow and the willingness to commit capital?

  • Support for aftermarket

Did the bank describe their firm’s aftermarket services?  What is the kind of conferences and other industry events will the banks sponsor? The bank needs to do its research and find it therapeutic areas if any.

  • The valuation methodology

What are the methodologies followed and recommended positioning of the company? Find out the kind of companies that represent the best comps. Has the bank come up with a methodology that best describes its value to the company? The kind of value metrics the investors need to focus upon.


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