Clemens Buss shares advice on mergers and acquisitions.
For the past 25 years, I have provided investment banking type services to a large number of established corporations, startups, venture capital and private equity firms, and other entities. During the first 15 years of my career I worked for Tier 1 investment banks, for the last 10 years I have worked through my own firm, Chateau Partners. Most of the M&A transactions I work on now are in the $50m — $250m dollar range. Chateau Partners has never done any marketing — 100% of my current business is based on referrals. A number of my former clients have asked me for something that they can forward to their friends and colleagues as they would like to recommend the services I provide. That’s why I thought I’d take advantage of the current downturn in M&A activity to write this Medium article.
The Quick Summary
I have been advising on mergers and acquisitions, financing and other corporate transactions for over 25 years and have completed transactions as large as $50 billion and as small as $15 million. In total, I have been involved with well over 200 transactions in my career.
VCs and founders realize that many startups need better M&A advice. They tell me that the leading investment banks tend not to get involved in transactions in the ~$100m range and that second and third tier firms tend not to have the same level of experience, ethics or senior banker involvement. Too many transactions fall apart or transaction terms aren’t optimized. Some bankers are more interested in making a “quick buck” and don’t have the best interests of their clients in mind. I’m sure many are familiar with the chapter in the book Freakonomics that talks about how real estate brokers take a different approach to selling their own home vs. selling their clients’ homes. The book mentions that on average agents’ own homes are significantly longer on the market and fetch higher prices than those of their clients. The incentive for the real estate agent is clear: close a transaction as quickly as possible, collect a transaction fee, and then move on to the next one; the same incentives apply to investment bankers.
Key points include:
M&A advice for startups
Issues with investment banking engagements
Read the full article, A Different Approach to M&A and Capital Raising Advice, on Medium.