Was curious if there was a big difference or if anyone could shed light on the difference between a M&A firm and a "business broker" since I've seen them both very recently. Not from a job perspective, just simply a operations type of aspect.
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Business brokers work on substantially smaller deals than M&A bankers; I think I've heard that $10 million EV is typical. As a result of the smaller transaction sizes, they focus pretty much entirely on marketing the company and connecting buyers and sellers. An M&A firm will do that, but it will also analyze the company's financials and various possible financing strategies extensively, since financing larger transactions is generally more challenging and more risky for the buyer.
http://www.highrockpartners.com/business-broker-vs-ma-advisor-vs-invest…
This link provides a solid explanation, although most people don't really distinguish between M&A advisors and investment bankers the way this does... Those terms are usually used interchangeably, with the only difference that I can think of being that M&A advisors don't raise capital for companies.
Business brokers are not your traditional investment banks. The definitive profile of an investment bank is typically the legal ability to engage in securities dealing. Although business brokers work on M&A deals, they do not hold a balance sheet as a FINRA regulated firm. Investment banks are actually banks, while brokers are only advisory shops.
I agree with the above on the smaller transaction values. That coupled with the inability to broker an exchange of money, they typically do not gauge business value as extensively, such as by putting the companies under multiple scenarios since they're not extending any type of financing. The goal is to primarily get these more unsophisticated companies in tip-top shape to be properly represented in what tends to be more lopsided transactions from a power dynamic.
You see brokers a lot on the buyside because they're constantly marketing some new company. They can present financials, probably in better form than without the advisor's help (if the advisor is sophisticated enough to know how to look at P&Ls) but they don't really have a need for your traditional football field investment banking valuation ranges.
It's actually a pretty interesting concept. Technically, you can use the distinction to engage in various advisory schemes like unfunded search shops or different advisory/consulting practices to small businesses.
Mostly true. Though important to know you don't need a balance sheet or a bank charter to deal securities and be FINRA regulated.
In two words: complexity and scale.
There isn't. An ibanker is a business broker who thinks he's something lmao. In the end he's desperate to buy and sell shit. Like that peddler that keeps coming by your house with unsolicited bs. Bro go tf away
Why does bro hate Investment Bankers so much?😭 Enjoy Capital Markets lil bro.
Fucking retarded coverage bankers. Who tf does an 80 pg deck to woo clients. Fucking so brain dead retarded. Cap markets Max 10 slides + good relationship = $$$$
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