Trusting Your Entrepreneurial Intuition
“Intuition becomes increasingly valuable in the new information society precisely because there is so much data”.
—John Naisbitt, Author, Megatrends
Ready to Launch
Congratulations! Your company is growing and you have the right people in place, backed by robust business systems. Poised for hyper-revenue growth, your firm is an excellent acquisition target.
The time has come to raise capital or sell. And the right investment banker can propel your company forward or help you negotiate a lucrative exit.
Now for the next step:
- How do you decide which investment banker to hire?
- How do you know who you can trust?
- Who will look out for your best interests?
These are but a few key questions you must answer in order to hire the best investment banker for your company.
Making Responsible Decisions
You are the decision maker and leader of your business. You must not only hire the right banker, but also continue to run your company, set the strategy for the upcoming sale, and keep your team challenged and motivated during this time of transition: a tall order for anyone.
The entire process will be exciting for you, your business, and your family. But it is a big step and you don’t want to stumble.
As you interview potential representatives, you will soon realize there are many good investment bankers in the world. You’ll meet individuals with valuable backgrounds who have executed many successful business deals. Numerous qualified investment bankers will pass your initial experience and background test.
All things being equal, you must now take your vetting to a deeper level. It’s time to listen to your entrepreneurial instinct.
Give it the Gut Test
Great entrepreneurs need more than just balance sheets, wireframes, and systems. They learn to identify character and trust their intuition. Business geniuses often rely on instinct—that internal thermometer—to help them make good decisions. They go with their gut.
Tune into your gut feeling to determine which investment banker will work for you. Get a sense for who will keep your best interests in mind even when you do not have constant interaction. You must feel confident that the partner you select will do the right thing for you and your company at all times, especially when no one is monitoring their activities.
Ponder these questions to hone your entrepreneurial instinct:
- Do you trust the lead banker, key associates, and all members of the investment team?
- Were there any inconsistencies among comments from team members?
- Have you spoken to enough of the banker’s past clients to get a good feel for those business relationships?
- If roles were switched and you weren’t the client, would you still feel confident that this banker was being straightforward and forthcoming?
Heed Your Instinct
You are a successful entrepreneur for many reasons. One reason is that you probably have a good instinct about the people you meet, the opportunities that come across your desk, and the potential partners you consider.
The same goes for selecting your investment banker.
While our entrepreneurial instinct may not be right 100 percent of the time, not following it can be a recipe for disaster. I can’t tell you how many times I’ve heard successful people say, “I wish I had listened to my gut!”
Although some experts claim it is possible to select a good investment banker based on Rolodex input, I believe this thinking is shortsighted at best.
For my money—assuming that the bankers under consideration have all passed the experience and reputation test—I would allow my entrepreneurial instinct to cast the final vote.
Consider the Precedent
Before dismissing this approach as too touchy-feely for serious business, consider that some of the world’s leading entrepreneurs tout the importance of entrepreneurial intuition:
- Barbara Corcoran knows a thing or two about entrepreneurial instinct. Barbara, the first female shark on ABC’s Shark Tank, says, “Don’t you dare underestimate the power of your own instinct. Many entrepreneurs who ignore their instinct regret it later.”
- Kevin Leary, Shark Tank’s Wonderful, says that when he doesn’t listen to his gut, he gets in trouble.
- According to Bill Gates, “Often you have to rely on intuition.”
- Donald Trump claims, “Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper.”
- Steve Jobs said, “Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.”
- As Susan Pulliam and Karen Richardson wrote for The Wall Street Journal, “Warren Buffett has relied on gut instinct for decades to run Berkshire Hathaway Inc.”
With so much on the line, it ultimately boils down to trust. You must feel confident that the banker you hire will become an integral part of your transaction team. Give it the gut test.
If doubt still lingers in the back of your mind, your entrepreneurial instinct is telling you that individual or group probably is not a good fit to represent you.
If you feel a surge of excitement and eagerness to get started, congratulations! You likely have found the right investment banker to join your deal team.