Choose the Bank, Not the Brand

Paul Circle

Paul Hill
COO
Clarity Systems

When we were looking to take Clarity systems to market, it was important for us to pick a banker who could drive a competitive bidding process and maximize the outcome of the transaction.

Relationships With Buyers Are Outdated

To a large extent, the central pitch from most senior bankers at large investment banks revolves around the banker’s vast rolodex of buyer contacts and their relationship with these buyers. 20 years ago, this would have been a valid argument since knowledge about key employees within large organizations was essentially a black box, but in today’s environment, these contacts have become largely commoditized due to the treasure trove of publicly available information. There exists a plethora of resources such as LinkedIn, Gartner, and other databases, where contact information for senior-level executives at potential strategic acquirers as well as relevant investment professionals at financial buyers can be researched. Even the entrepreneur and his/her company can research the contact information for relevant buyers, given some time.

Brand Doesn’t Matter

One common misconception is that hiring a bank with a brand name can yield a better outcome when reaching out to buyers. However, once you’ve reached out to all potential buyers, the brand name of the bank does not play a relevant role in a buyer’s internal decision-making process. Instead, company-specific information which is provided within the marketing materials is the true driver of the internal decision-making process and will spur a response from a buyer if they find the company to be attractive.