Good time to join small investment bank? $5-20mln deal size

Given the macroeconomic conditions and lack of deal flow the big league IBs are facing, is this really a good time to join a small investment bank that does 5mln-20mln ticket size deals with 4 member team? I'm being offered an intern role and I'm currently at Risk Department in Goldman Sachs in Poland (been 7 months). Should I think twice?? My passion and aim has been IB and having no previous background in IV this is my first opportunity.During the interview I did ask them about how they are catching up and facing the current macroeconomic environment but seems they aren't very bothered with the deal flow currently.They have 4 deals (at different stages) currently which they are working on. What are your thoughts?

 
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Can't speak to Poland or Eastern Europe, but Western Europe and the U.S. haven't seen much of a fall off in the lower middle market in terms of activity, though this is at the bottom edge of that segment. Things I would diligence or ask questions on:

  • How are they staffing deals, given only four people (assuming most are senior)?
  • How many active deals do they have and what is the average duration of engagement? Deals are taking longer to get done and you don't want to get stuck at a shop taking on a high volume of low quality deals that have little chance of closing
  • How are they sourcing their engagements? Vertical expertise? Regional networks (accountants, attorneys, etc.)? What's their angle?

Could be a decent way to learn the ropes and move up market at some point, though who knows when hiring will get back to normal. After 2021 and early 2022 when you couldn't find decent laterals, there is suddenly an abundance of talent.

 

Thanks a lot for sharing your thoughts! The IB I mentioned shares office space with a law firm and work directly with this corporate law firm for legal due diligence and other aspects. This shop is also a partner of global M&A deals aggregator platform or (idk how it’s called) where member IBs get visibility on potential deals that are looking for engagement from an IB and expecting pitch decks for the engagement. 20% of their deals come through this M&A aggregator.

They have closed 14 deals and are 7 years in business in Poland. The founder is experienced M&A professional and team also has a former Blackrock /CFA person. During interview they really emphasised their belief of taking fewer deals but higher conviction and synergies rather than any deal that comes thru.

All of the above factors and current situation of being at GS in BO in Poland as Risk Analyst. Do you have any thoughts on making this move? This is an intern role :) I’m almost there with my decision to move but I really need to seek suggestions if I’m not playing the wrong move with this……….

 

If your long term goal is IB LMM shops are a good place to start esp coming from your background. Can move upwards from there later in life . However Aggregator platforms won’t be viewed as IB and may infact be detrimental to your long term prospects.

Take this with a pinch of salt as am not too familiar with the local market dynamics

 

Thanks a lot for your input, do you please mind elaborating on the negative connotation to the M&A Aggregator / Member Associations in the industry? Why’s that so?

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