Have Prospective Buyers for Your B2B SaaS? Why You Should Still Hire an Investment Bank
Often, founders receive unsolicited interest from parties looking to buy their businesses. It may appear unnecessary to engage an M&A advisor like Discretion Capital when you have an offer at hand. However, employing experienced professionals to manage and ensure a successful deal is a valuable service worth considering.
Many founders believe that hiring an investment bank is one of the best decisions they've made, even when they had existing offers. If you view M&A advisors as only valuable for generating leads, you may not realize their full potential. Bankers coordinate and execute processes, create competition and urgency, negotiate terms, and optimize outcomes on your behalf.
You can either attempt to manage the process yourself, consuming time and energy, or hire us to handle it for you, while you keep your eye on the ball in terms of continuing to grow your business - nothing ruins deals like a business cratering because the founder got distracted with M&A negotiations.
Unlike most other investment banks, Discretion Capital only charges a success fee if you sell your business. All of the founders we’ve worked with who brought us an initial offer have achieved substantial increases in price far above our success fee.
Founders who opted to manage the process alone found it challenging to handle multiple buyers and lacked the network and time to research potential buyers to establish a strong market. They also faced negotiations with Corp Dev and M&A professionals whose sole job is buying businesses at the lowest price possible.
A good investment bank allows founders to concentrate on growing their business while maximizing the speed and certainty of closing deals, optimizing terms, and increasing valuations.
Genuine buyers who are truly interested in acquiring in your business will not be put off by your decision to hire an investment banker. In fact, experienced buyers often recognize the value of working with an investment bank, as it streamlines the process and adds a level of professionalism to the negotiations.
Once engaged, we will tactfully incorporate any interested parties into the process, ensuring that their involvement is seamless and non-disruptive.
By involving more parties in the process, we are able to create a competitive environment that benefits you, the seller, and ensures that nobody is trying to pull a fast one.
A competitive dynamic between parties results in better bids, optimized terms, and a higher likelihood of closing the deal.
Hiring an investment bank often leads to a significant increase in interested parties, many of whom were unknown to the founder. More suitors allow you to find the best fit for your company and gain different insights.
Investment bankers are skilled at creating urgency, ensuring that parties understand the need for a timely transaction. Healthy competition aids in establishing urgency, with bankers setting the process pace.
Improved outcomes stem from greater leverage, increased urgency, and experienced negotiators. Having professionals be your bad cop ensures you get the most for your business, while still remaining on good terms with a buyer you may be working with once the deal closes.
Emotions can hinder negotiations, so a level-headed third party advocating for you is advantageous.
Founders often face professional buyers and investors who know negotiation tactics. An investment banker levels the playing field, ensuring leverage until the deal closes.
In hindsight, founders consistently appreciate their decision to hire an investment bank, even with initial serious interest. We have several examples of founders adding several million dollars to their final price even after coming to us with an offer in hand.