I might be interning at a business broker firm this summer and I was wondering if it's good enough to settle on as a freshman heading into summer or should I keep looking for for something at a m&a advisory firm or very small IB firm.
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Hey Boi, I'm here because nobody responded to this thread after a few days...maybe one of these resources will help you:
Fingers crossed that one of those helps you.
Bump
I think it’s a good opportunity because you should get valuation experience and deal exposure. It’s like investment banking for your local car wash or dental practice.
It seems like they use a simplified DCF model for their valuation. So it would be some good experience for the summer? I'm still not sure if I should settle or keep networking for a gig at a m&a advisory firm, thoughts?
It's a great gig for your freshman summer if you ultimately wanna do IB
I have to disagree with others. On the one hand, it is "deal-related" experience if you spin it the right way to someone that wouldn't otherwise know better. On the other, by and large, the industry is full of sleazy salespeople that don't know a damn thing about valuation, process, etc.
Think about the model for a second: broker goes and meets with as many tiny business owners as possible, convinces them to let him list them, has the seller send them information that they literally cut and paste into a template (similar to business valuation at accounting firms) with no substance or individuality, plasters them on websites/email spams everyone he can find and charges fees that often make real estate brokerage fees look like a deal. And when an eventual buyer comes along, he puts the onus on business owner to satisfy diligence, negotiate the purchase agreement (with the help of whatever small, shitty lawyer the seller has) and prepare for closing.
That being said, I think your initiative as a younger student is admirable. But, I wouldn't focus on trying to leverage your experience at these brokers into IB, but rather focus on the qualitative elements that you acquire, either at this firm or throughout college (e.g. good communication, writing skills, responsiveness, taking initiative to make a first attempt without asking for help, etc.).
DISCLAIMER: I am obviously bias and think business brokers (as an industry) as scum. But, there are obviously some exceptions and groups that tend to do things the right way.
Thank you for the reply. I can definitely see where sleazy people can come into play although the guy I've met seems like a really nice guy—I was recommended to him by some m&a advisory guys who were also really knowledgeable and nice. Looking at what he does it does seems relatively simple, at least compared to IB or M&A Advisory, which is partially a reason why I asked this question. The offer still stands until I finish this year so I will try to contact some more m&a advisory firms around me.
Fair enough. Use your judgment and if you've done diligence on this opportunity (which you have) and it seems like a good opportunity, it probably beats many alternatives. If you can find an internship at an investment bank (beware of the usage of M&A advisory, as there are plenty of M&A advisors that are merely business brokers), it would be more educational and better prepare you.
The barriers to entry is low which invites many not-so great M&A advisors. But calling the entire business brokering industry scummy is a stretch...
I personally built a Real Estate portfolio sales M&A shop while in final years of Undergrad alongside seasoned RE Brokers who have great buy-side connections.
I built my shop around ex-REIT, ex-IB, and ex-CRE guys. I made it a mission to ensure my shop gave high quality service.
We were also very software-heavy in the back-end side of our firm.
We also took the cashflow every year and put it back into the advisory business but we also took the 2nd half to build out a property management business.
Doing all this allowed me to create a CRE advisory firm that transacted on over $2B+ in 5yrs averaging 2% commissions per year . Then I sold the firm to a larger CRE company at a > 6X multiple with a 85% ownership stake.
Goes to show that not all players in an industry are sleezy.
Now, I am a full-time CRE investor in my mid-20s. I buy plazas, medical office buildings, apartments, & Industrial assets.
Did a business broker/LMM internship this school year as a freshman. Definitely a good opportunity because you learn about the deal process and get the basic modeling experience. Great talking point in interviews as well since that will most likely be the first thing the interviewer notices. Its very small deals but better experience than what most freshmen are doing in the summer (flipping burgers, tutor, etc)
Do you think it will help you for SA recruiting/Do you think it's good enough for SA recruiting?
Of course it will. Make sure you are able to talk about what you did
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