How to Pick A Broker




Imagine you are in a world where you are judged on how pretty your partner is, but you are blind and you have no idea what she looks like. She will tell you she is pretty, but you cannot trust her as she might be biased.  


To do a good job, you will establish what pretty is, redefine it based on a set of guidelines, and then go look for a partner that meets those guidelines. But you are still blind, so you have to trust someone to guide you.




Picking a broker is about relationships; brokers do deals with people they know and they do deals where they have faith that they won’t look stupid. The average company has the bandwidth to maintain 3 – 4 broker relationships maximum and they can really choose which relationships to invest in for long-term results.


How do you, as a company, pick your brokers?


  1. Does the firm like your commodity/sector?

  2. Do they like your stage of development?

  3. Do they like your style of management/team?

  4. Make sure the average deal size the firm has fits you today and fits you for the next 24 months.

  5. Develop two relationships that fit the company as it is, as well as two that you can grow with.

  6. Make sure the firm has a history of delivering on written promises. Everyone lies, but once a deal is announced, can the broker live up to it? Be wary of lots of withdrawn deals, delayed deals, etc.

  7. Does the lead Investment Banker live within their means? Do not pick a banker who is always broke and do not pick one that is complete flash. You want someone who is stable and clean.

  8. Check the LinkedIn profiles of the sales staff. Were they around when the last deals were done or have they all left?

  9. Do they trash talk companies when you talk to them? It’s the same as with your friends: if they trash talk other people in front of you, they will trash talk you later.

  10. Develop a core relationship, but ALWAYS CC other people in communications. People leave firms all the time and you do not want to start from scratch when it happens. Have two or three active relationships at the firm.


Make a point of pinging the 3 – 5 firms you want to work with every 4 – 6 weeks. Make sure you have one or two soft touches and one hard touch per quarter. Keep them in mind when you read interesting articles. Develop the relationships. Too often I see companies going with brokers who do all the relationship work, but too much of the time that leads to an imperfect relationship and/or a bad match.


The fact is, you should dial a broker for the best match, not wait for them to call you.


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