Should I Hire an Investment Banker?
Hire a banker for complex deals ($50M+), auction processes, or if you lack exit experience. Go solo for simple deals under $20M with identified strategic buyers.
When You Need a Banker
Clear Yes Scenarios
Complex deal structures - Multiple buyers, earnouts, stock deals, or unusual terms
Auction processes - Running a competitive process with 5+ potential buyers
Large deals - Generally $50M+ where the banker fee is worth the expertise
No experience - First-time exit and you don't know the process
When You Can Go Solo
Skip the Banker If
Strategic buyer identified - You have a clear buyer who makes sense
Simple deal structure - Straightforward cash transaction
Smaller deals - Under $20M where banker fees are too high relative to value
Previous exit experience - You've done this before and know the process
What Bankers Actually Do
- Create marketing materials and manage the process
- Identify and reach out to potential buyers
- Negotiate terms and manage multiple bidders
- Provide market knowledge and comparable deal data
- Handle the administrative burden so you can run your business
The Real Cost
Typical fees are 3-10% of the deal value, depending on size:
- $5-20M deals: 8-10% fee
- $20-50M deals: 5-8% fee
- $50M+ deals: 3-5% fee
Plus expenses during the process (travel, materials, etc.)
How to Choose the Right Banker
Look for:
- Experience in your industry and deal size
- Existing relationships with likely buyers
- Track record of closed deals (not just started processes)
- Senior banker involvement (not just junior staff)
Red Flags
- Promises unrealistic valuations to win your business
- No recent deals in your space
- Junior team will handle everything
- Upfront fees before any work is done