Preparing to sell your business is one of the most important decisions you’ll make as an entrepreneur. Whether you’ve grown the company from the ground up or scaled it through acquisitions, this next chapter deserves careful planning—and the right advisors.
One of the most critical partners in this process is your investment banker or broker. Their job is to help you position certain aspects of your business for sale, bring the right buyers to the table, and guide you through a successful exit. But before any of that happens, you need to negotiate an agreement that aligns with your goals and protects your interests.
Here’s what you need to know.
Start by Ensuring the Right Fit
Not every investment banker is the right fit for every business. One of the biggest missteps owners make is hiring a banker whose typical deal size doesn’t align with their own.
For example, if your company is valued under $100 million—a common profile among our clients—working with a banker who usually handles $500 million+ transactions may lead to misaligned incentives. These bankers often charge higher minimum fees or percentage-based commissions that don’t reflect the size or complexity of your deal.
Key Questions to Ask:
An investment banker who understands your company’s scale and industry dynamics will be better equipped to attract the right buyers—and negotiate terms that reflect your true value.
Broker or Banker: What’s Right for Your Deal?
For companies at the smaller end of the mid-market spectrum (say, under $25 million in revenue), engaging a business broker may be more appropriate. Brokers often focus on
privately held businesses with simpler ownership and operational structures. Their fees may be more flexible, and their networks better tailored to private equity firms or individual buyers.
However, if your business has:
…then an investment banker is likely the better choice. Bankers bring a higher level of sophistication to the process and typically engage in broader buyer outreach, including institutional and cross-border buyers.
Choosing the right type of advisor isn’t just about the cost—it’s about fit, experience, and reach.
Industry Expertise Gives You an Edge
In a sale process, industry experience is everything.
An investment banker who knows your sector can speak the language of potential buyers, anticipate red flags, and help craft a narrative that positions your company as an attractive, high-value target. This is especially important if your company operates in:
Industry-specific knowledge allows your banker to set realistic valuation expectations and engage buyers who already understand your business model—saving time and avoiding missteps during due diligence.
Negotiate Key Terms Thoughtfully
Once you’ve selected your banker or broker, it’s time to review their engagement letter—the formal agreement that outlines your working relationship. Here are a few key terms to pay close attention to:
Having your lawyer involved in reviewing or negotiating the agreement is crucial—small contractual oversights can become costly headaches down the road.
A well-negotiated investment banker agreement sets the tone for a smoother, more strategic exit. By aligning with the right advisor and securing terms that reflect your business’s goals, you’ll be in a stronger position to maximize value when the time comes to sell. And like all important deals, the earlier you plan, the more options—and leverage—you have.
At GNS Law, we help business owners negotiate favorable terms with investment bankers, structure deal-ready companies, and exit with confidence. Whether you’re evaluating a sale now or just laying the groundwork, we’ll help you approach every step with strategy and clarity.
Thinking about engaging a banker or broker for your business sale? Let’s talk about how to structure the process for success.
For more information, contact us at info@gnslawpllc.com.
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