Many M&A “advisors” are not effective

It is normal for a business owner who thinks about selling his company to be afraid of hiring advisors.

It is a key decision, there is a lot on the line, and many things are going through his head:

“Are they really going to fight for my best interest?
Do they really have a large enough contact base to sell this?
What if they charge me a lot of money, make we work, play around and then nothing really happens?”

These are all legitimate feelings; choosing the right advisor can be the difference between being able to sell your company or not, between maximizing its value or selling it poorly.

It is true, a lot of “advisors” don’t do an effective work. They are good at documentation, valuations, analysis, etc. But they don’t know how to locate the right buyer, they don’t have the technical resources and man power needed, so they can’t spend the necessary time to find the right buyer. That’s why regardless of their efforts and great skills they fail to sell your company and let you down.

A lot of “advisors” do not know how to locate every possible buyer around the world to find the best fit for your company, ideally the one that will pay the most, or they simply don’t have the resources to do it.

Due to this they are unable to find multiple buyers to start an auction, generating competition, which would drive your company price up and maximize its enterprise value.

Our experience in dealing with more than 1000 mandates has shown that 70% of the outcome of a business sale is based on an extraordinary amount of work on the buyer search, and contacting of the key decision makers. That is an intensive and heavy work load that can’t be done by a small team or a single advisor, the reality is that without a strong support system they will not be able to do it.

If this is your company and it is the most important operation of its history, You deserve an elite team working to maximize the transaction sale value.

If you want to sell your company, make sure that the advisor you choose can provide you with this level of search capabilities to find your buyer.

Written by Enrique Quemada, president of ONEtoONE Corporate Finance.