Choosing an M&A Advisor: 8 Questions to Ask

January 14, 2020 Nikki Jefferson

You’ve decided you want to sell your software company and now it’s time to begin preparing the company for sale. You can choose to either hire an advisor to help sell your business or sell your business without an advisor.

Why should I consider hiring an M&A advisor?  

M&A advisors specialize in sourcing buyers, preparing companies for sale, and running auction processes. A qualified and experienced advisor will likely be able to get you a better outcome than you'd be able to get without representation. Advisors will use their expertise and connections to source good-fit buyers and will also typically help to prepare your Confidential Information Memorandum (CIM), marketing materials, and financials. They will run the process for you end-to-end so you can continue to focus on running your business. This includes interacting with prospective buyers and negotiating on your behalf. 

How do I choose an M&A Advisor? 

Individual advisors may have different strengths, so it’s important to ask your prospective advisor about their specific expertise. Doing your research and asking these questions can help ensure you choose the right advisor for you: 

8 Questions to ask a Prospective Advisor: 

  1. Can you explain your breadth of knowledge in software M&A? 

  1. What is your experience in my industry and geography? 

​​Identify the advisor’s suitability and whether they’ve taken the effort to research your circumstances.  

  1. Can you give me examples of companies you would propose inviting to auction? 

  1. Can you provide references from previous clients? 

It’s important to speak with references in your industry and geography so that you can get more perspective on their level of experience within your niche.  

  1. How would you market my business? 

How will the advisor position the business to the general market and to potential acquirers?  

  1. Where do you source your buyers and how many buyers that meet my criteria are in your database? 

Assess the strength of their buyer network and determine if they have taken the time to understand what you are looking for in a buyer. 

  1. Do you work alone or on a team? 

Determine if they have the support of a reputable company to help them through any challenges. Also identify if they have connections to legal or finance resources in case you require them.  

  1. Can you explain your typical process? 

Things to consider when learning about their process: when do they go into exclusivity with a buyer? How do they manage negotiations? How do they decide who to invite to the first round of bids?  

Next Step: Beginning the M&A auction process

If you hire an advisor, you will likely engage in an M&A auction where multiple buyers are invited to put an offer on your company. Once you hire your advisor, you will need to let them know how you want them to conduct the auction. Some sellers choose to run a broad auction while others choose a more targeted auction. 

About the Author

Nikki Jefferson

Director of Marketing and Corporate Development for Mergers and Acquisitions at Volaris Group.

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