Five Things To Consider When Retaining A MicroCap Investment Banker
In the post Heinzl shared five things to consider when deciding which microcap investment banker is best for your company:
1. Capabilities/Credentials/Experience. Who will lead the equity capital markets and syndication functions for your company’s offering? Who will be your company’s primary day-to-day contact at the banking firm? What are the most relevant transactions they have worked on and how successful have those deals been?
2. Positioning/Knowledge of the company/valuation methodology. What is the recommended positioning of your company? What is the proposed strategy for positioning relative to other comparable or competitive companies? Which companies represent the best comps? How would your company be differentiated from some of the recent offerings (attempted or completed) in your sector? Has the bank provided a description of the valuation methodology it is using to value your company? What valuation metrics will investors focus on?
3. Shared values. Take your time and make sure you are picking a banker that shares your values and spirit. You need to work with a banker that is excited about your vision for the company. What level of vetting has the banker conducted with its research analyst to date and what can they share about their analyst’s view of your company? Is the bank currently working with any of your competitors? If so, has it decided how to address potential conflicts of interest?
4. Execution strategy. Are the senior members of the investment banking team committed to attending the organizational meeting, drafting sessions, and other key meetings? What process does the bank follow for pricing and allocating shares? What are the bank’s views on stabilization activities and strategies, including willingness to commit capital?
5. Aftermarket support. Have the banks described their firm’s aftermarket services, including non-deal road shows. What conferences and other industry or investor events does the bank sponsor that are suitable for your participation? Ask the bank to describe its research coverage expertise in the life science industry, and in your targeted therapeutic areas, if any. Do they have a strong retail division?