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ARTICLES

20 signs to NOT trust your M&A advisor

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These critical items should ring warning bells for owners when selling their businesses:

  1.  When her valuation of your business seems too good to be true.
  2. When he cold called you instead of being referred by a colleague or trusted advisor.
  3. When he tells you he has the buyer 'lined up' even before you engage him.
  4. When she lays claim to lots of wealthy overseas buyers.
  5. When you sign up, pay the money and wait…and wait….and wait…..and wait….
  6. When he tries to marginalise your accountant.
  7. When she charges no up-front fees and only a success fee.
  8. When he charges by the hour and no success fee.
  9. When he charges a high up-front fee and very low success fee.
  10. When she wants to run newspaper adverts.
  11. When he does not market and sell businesses every day as his primary activity.
  12. When she has no track record in marketing and selling businesses in your price range.
  13. When his day job is as your professional advisor and he has no marketing support from a specialist M&A advisory firm.
  14. When he can't demonstrate how he will target your industry effectively and comprehensively.
  15. When you don’t know how or where your business is being marketed.
  16. When you aren’t asked to approve all marketing material (before it’s used!).
  17. When you aren’t asked to provide information about your business.
  18. When you don’t know what your Information Memorandum (IM) contains or have approved it.
  19. When you don’t have the opportunity to approve in advance who will receive every IM.
  20. When you don’t receive regular written reports on who has responded and their status and feedback.

If you are unsure why any of these may cause problems, just ask us or another reputable M&A advisory firm.

Unfortunately those of us specialising in M&A have heard all the stories and have had to help hapless clients pick up the pieces.