Not uncommon for bankers to also do angel investing or accept part of a prior fee in equity. Can’t recall seeing an explicit disclosure outside of some very fine print. Not sure how that the banker having an equity stake disadvantages a buyer except in a purely hypothetical sense. 

 

I’m trying to figure out what the conflict is.

You’re worried that they own some of the business, so they’ll act in their own best interest and paint the company in a good light so they get the highest price… as opposed to a banker who gets paid on transaction value and will act in their client’s interest and paint the company in a good light so they get the highest price?

Agree that it’s not unheard of, I’ve received deals from major banks where the senior banker had an equity interest in the deal

 
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That is odd. I remember hearing about BDs disclosing relationships / having restrictions when it comes to marketing a company they have an interest in, but never really understood / explored why. Perhaps it has something to do with having an ER team and needing to set certain firewalls? I don’t really think that’s the case, rather there’s some giant work around as it sounds pretty odd to have a law that says “you can’t sell what you own” to a freaking bank. 
 

Following for answers and corrections 

 

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