I’m affiliated with several dozen companies that would like to expand through acquisition. They have the financial resources but are very unsophisticated when it comes to both M&A and even business operations and value growth.
My role would be less about the transaction and more about being an advisor through acquisition, integration, and value-building. Because of this longer-term engagement – I want a healthy relationship with the investors. In terms of filtering and selecting prospective investors – what are the top 1 or 2 qualities you would look for and why? (Besides whether or not they have the money.)
You would want to frame these discussions in the context of their overall growth strategy. Acquisition should be one option, but they also should be considering organic growth of existing products/services, R&D to develop new products/services, partnering, etc. Structure your fee on a retainer basis, perhaps. If you’re only getting paid a success fee for M&A, that is the only thing you will recommend to them. They may want impartial advice.