Private Investment
Banker "Boot Camp"

Private Investment

Private Investment
Banking "Boot Camp"
(Download printable PDF)

John D. Emery


Association of Private
Investment Bankers


Hyde Park Group

The Great Pyramid of Giza

©2009 Hyde Park Group LLC
All rights reserved.
Hyde Park Group, LLC;
Kensington Partners, LLC;
Association of Private Investment Bankers, LLC
are registered trademarks.

Private Investment Banker "Boot Camp"


Industry Overview
Understanding the history of our profession and its evolution from business broker to intermediary to Private Investment Banker is important in order to articulate a business strategy that works for you and to build self-sustaining competitive advantages into your practice.

We will look at the short-term and long-term income producing opportunities for Private Investment Bankers pursuing our profession on either a part-time or full-time basis.

Getting Started
We will quickly shift our discussion to "what it means" to be a Private Investment Banker and how to develop entry strategies that work for you. Since each person brings a specific set of skills and contacts, we will discuss how to leverage these assets to minimize the barriers-to-entry that you will encounter on entering the profession.

You will be encouraged to view the Private Investment Banking industry as an extension of everything you have accomplished heretofore, rather than the start of a new business career.

Developing Seller Prospects
The first question newly-minted Private Investment Bankers ask is, "Where do I find clients who are ready, willing and able to sell their companies?" To answer this question we will examine "Seller Psychology" and the life-events that drive owners to think about selling their companies. By the end of this discussion, we will have defined alternative strategies from which to choose in order to determine your best path forward.

Our analysis will include how to mount direct mail and strategic selling campaigns, organize seminars, attend industry events, build websites, and create active public relation programs. Since there are more marketing options than any new person to the profession can possibly pursue, we will outline a "Strategic Marketing Program" for your first year that is tailored to your personal strengths and proclivities.  

Convert Interested Seller Prospects into Signed Authorizations
Since every prospect is critical to your business, you will receive a list of talking points to discuss on the telephone and information to include your follow up letter. In addition we will discuss how to prepare for your first client appointment, conduct your first face-to-face meeting, and respond to inevitable requests for more information that arise in the form of objections.

Authorization / Listing Agreements
Unless you have an "authorization" to sell a company (listing), you do not have anything.   Authorizations are your "inventory" and can take many forms. In the early stages of your practice, you will be encouraged to stick with tried and proven listing agreements. You will learn to work with more nuanced listing situations that require greater sophistication.

Our analysis will include the details that must be included in every listing agreement and a thorough discussion of how to structure fees. Making sure that Sellers understand "how success fees will be calculated" and "when you will be paid" will save you much heartache at a later date.

Valuation of Companies
Eighty percent of the saleability of a company is dependent upon the Seller's understanding of how companies are valued in the marketplace. Pricing companies for sale is very different than what is described in most of the formal valuation literature. Market pricing is driven by what Buyers will pay, not the price at which Sellers want to sell, nor is it the opinion of an appraiser who has never sold a company and is paid to render glowing appraisals. Understanding the economic dynamics that drive Buyer behavior will eliminate many false starts.

Pricing middle market companies has changed very little over the last fifty years. We will discuss pricing fundamentals, so you can confidently price companies and explain the pricing rationale to Buyer prospects.

Writing the Confidential Descriptive Review (CDR or "the Book")
Writing "the Book" has become an art form among many MBA-types who have never sold a company. Thirty years ago, the convention was "tell a Buyer what they want, as they want it..." This minimalist approach led to many problems. At the other extreme, many inexperienced Private Investment Bankers mistake writing an exhaustive "Book" with making the sale.  

We will focus on how to define each of the audiences for whom "the Book" is written and how to satisfy a Buyer's legitimate need for information. "The Book" is not equivalent to a formal prospectus; its only purpose is to provide "enough" of the "right" information to capture a Buyer's interest, ask for more information and take the next step.

Designing a Marketing Campaign to Find a Buyer for a Listed Company
As with valuations, carefully detailing a Buyer profile for a specific listing will eliminate much wasted time, effort and expense. Most Private Investment Bankers let the marketing materials reflect the company "as-is" rather than paint a strategic picture of what the company can become for the targeted buyer audience. Once you understand that selling a company is little different than how Proctor and Gamble sells soap, you will be well on your way to your first commission.

You will receive detailed checklists that will help you formulate marketing strategies for listed companies.  

Managing the Relationship with Buyers
Learning how to work successfully with Buyers over the long-term is integral to the M&A process.   This relationship is not as straightforward as it may seem.   We will outline how to create a strategic architecture that will maximize the probabilities of making a sale, increase the velocity of your deal flow in the intermediate-term, and leverage your relationship with Buyers into a strategic asset to secure new listings.

Maintaining Confidentiality
Sellers seek the services of Private Investment Bankers to help them protect the confidentiality of their intentions until they are prepared to make their intentions known. As Intermediaries, we have a variety of tools at our disposal to minimize early leaks. Our task is to institute a process designed to maintain confidentiality.  

How to build a wall around confidential material and adopt best practices will be discussed. Most importantly, owners need to be "drilled" on how to handle the various questions that arise from both suspecting and unsuspecting onlookers. In addition, we will discuss how to handle breaches in confidentiality.

Negotiating and Closing the Transaction
There is a rich body of literature regarding negotiations. We will describe negotiating principles that will lead to a consensus between Buyer and Seller. Our goal is to learn how to negotiate a Letter of Intent that will minimize the need for attorneys to renegotiate the business terms of a transaction.

Special Situations
How to work with early stage technology companies, public entities and international opportunities will be discussed. Many practitioners simply ignore these opportunities because they require out-of-the-box thinking, flexibility and care. We will discuss practical steps on how to include them in your practice.

Crossover Business Opportunities
Because the Private Investment Banking industry is in flux, there are many opportunities for practitioners to engage in ancillary activities. Arranging capital to be available to support the closing of transactions, raising financial resources to address capital structure needs, providing corporate advisory services and valuations for a fee, delivering turnaround and crisis management services, working as a Court appointed expert, trustee and receiver can be lucrative, and can be an integral component of every Private Investment Banking practice.

Managing "Your" Practice
The decision to maintain a solo Private Investment Banking practice, build a boutique company or grow a large industry leader is your choice. This discussion will weigh the pros and cons of each and suggest strategies you can use to achieve your strategic goal.

In addition to building a sound organization, we will discuss steps you can take to manage the various legal and financial risks posed by pursuing the Private Investment Banking profession.

Licensure and Other Legal Matters
Every industry has its legal challenges. We will outline specific steps that will minimize the chances of litigation and insure that your practice is maximally compliant with Federal and state laws at each step of the M&A process.

Private Investment Banking Association
The Association provides an umbrella within which "Boot Camp" graduates and selected seasoned practitioners can work together in a loose, flexible and project-oriented structure.

Every organization and industry must have a simple statement of rules by which it governs interactions among its members. In addition to receiving a statement of principles to which Association members abide, we will discuss examples of some of the types of ethical dilemmas that will confront us in our Private Investment Banking practices.

Sample Documents
Many sample documents will be provided that you can incorporate into your practice, subject to your corporate counsel's review. This includes sample authorization agreements, retainer letters, non-disclosure agreements and Letters of Intent. In addition, you will receive examples of Acquisition Criteria forms and marketing materials to include a Confidential Descriptive Review ("CDR" or "Book"), letters of introduction, teasers and marketing letters describing your services.


Private Investment Banker "Boot Camp" Syllabus