While I understand that a buy-side transaction tends to have more valuation work and modeling (whereas a sell-side mandate has more 'qualitative' work - drafting CIMs, meeting with buyers, etc.) can anybody who has experience doing both shed some light on how the different processes work in the real world? I.e - what's involved/a typical timeline for a buy-side deal versus that of a sell-side deal?
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Some first thoughts
Timeline: Buyside much shorter: engagement could even start in phase 2 with just c. 6 weeks to go. Sell side auctions take months up to a year. Buy side is intense, sell-side could be a little more flexibly in prep phase.
Financing: On buy side you arranging financing and managemen incentive plan
Success rate Many buyers, 1 seller: sell-sides have higher success rate
Business plan Sell side work includes describing/help developing a business plan. Buy side banker takes a view on that, but is slightly less involved I would say (very much dependent on how professional parties are/involvement of commercial DD providers/etc)
With respect to your take on success rate, do you feel like the longer diligence timeline for a sell side process would be outweighed by the higher investment velocity of running a buy side process? My banking friends definitely have higher win rates but their pain is palpable when the deal blows up after 6 months of busting their asses for some mouth breathing CFO only to have a minute detail ruin it.
I never focused on the number of tombstones, but rather on learning experience. I think you learn 10x of 1 sell side compared to 1 buy side. Seeing all legal documents, all offers, all financing term sheets, building a business plan, etc.
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