Your M&A or Capital Advisor – 7 Things To Consider

When it comes to selling your company or seeking capital, choosing the right M&A or capital advisor is a critical decision. While it might be tempting to handle these processes yourself, hiring a professional advisor can make a significant difference. Here are seven essential factors to consider when evaluating an advisor.

Capabilities

Focus

First and foremost, an advisor’s focus is crucial. A good advisor should have a clear and specific focus relevant to the size and industry of your business. For example, at Hillview Partners, we specialize in privately held, family-owned, or small investment group-owned businesses making between $300,000 and $3 million across various industries. When evaluating potential advisors, ask about their focus. If they can’t provide a clear, concise answer, they might not be the right fit. You need someone who understands your business’s unique characteristics and operates in your specific area.

Access

The second criterion is access. A valuable advisor should have an extensive network of contacts and direct relationships with potential buyers or capital sources. It’s not just about knowing a handful of people; it’s about having a trove of thousands of contacts and the ability to narrow that list down to those who would be specifically interested in your business and can act quickly. Ensure the advisor has real, reliable connections, not just a broad but impersonal network. They should be able to pick up the phone and reach out to key individuals directly.

Speed

Speed is the third factor to consider. How quickly can the advisor get your business to market, secure offers, and close deals? Many in the advisory and investment banking space might say that the whole process takes 18 to 24 months. At Hillview Partners, we aim to be in the market within two to three weeks, obtain offers within 100 days, and close deals or secure funding within six months. Speed is vital because the business environment can change rapidly, as we’ve seen in recent years. A quicker process can help you capitalize on current market conditions and reduce the risks associated with long delays.

Communications

Distraction

The fourth consideration is the level of distraction the process will cause for you as the business owner. Ideally, you should be minimally distracted so you can continue to focus on running your business. Our process at Hillview Partners is designed to require minimal time from our clients, primarily during the initial gathering of materials and towards the offer stage. The goal is to handle most of the work ourselves, allowing you to concentrate on maintaining and growing your business. A significant distraction can lead to deteriorating business performance, which is counterproductive to the selling or capital-raising process.

Discretion

Discretion is another critical factor. The entire process should be conducted quietly to prevent market rumors, protect your competitive position, and avoid unnecessary disruptions. You don’t want your competitors, clients, or employees to hear about the process prematurely. An advisor should ensure that only necessary parties are informed, maintaining confidentiality throughout the process. This helps protect your business’s reputation and operational stability.

Responsiveness

Responsiveness is the sixth criterion. Your advisor must be quick to respond to your queries and provide updates. Imagine trying to sell a house and not being able to get hold of your real estate broker; now multiply that frustration by a thousand because it’s your business at stake. At Hillview Partners, we prioritize hyper-responsiveness, ensuring that our clients hear back from us within minutes to a few hours. This level of communication is crucial in maintaining transparency, building trust, and ensuring that you feel supported throughout the process.

Producing the Optimal Outcome

Results

Finally, the ultimate measure of an advisor’s effectiveness is the results they achieve. The success of the advisor should be judged by the quality of outcomes they deliver, such as securing favorable offers or capital. While the previous six factors contribute to increasing the likelihood of a successful outcome, the end result is still paramount. Evaluate the advisor’s past performance and ask about the results you can expect. Although no one can guarantee specific outcomes, the advisor should be able to provide a clear understanding of what success looks like and how they plan to achieve it.

Conclusion

Choosing the right M&A or capital advisor involves carefully considering these seven factors: focus, access, speed, distraction, discretion, responsiveness, and results. Each of these criteria plays a vital role in ensuring a smooth, efficient, and successful process. By evaluating potential advisors based on these factors, you can make an informed decision that aligns with your business goals and maximizes your chances of achieving a favorable outcome.

Remember, while handling the process yourself might seem appealing, the expertise and network of a professional advisor can make a significant difference. Focus on finding an advisor who understands your business, has a robust network, operates efficiently, minimizes distractions, maintains discretion, communicates promptly, and delivers strong results. This comprehensive approach will help you navigate the complexities of selling your company or seeking capital, ensuring the best possible outcome for your business.