Working with an investment banker or advisor when you sell

Do you need an investment banker to sell your business?

You do not need one by law, but most owners selling to private equity benefit from expert help. Altair Advisers wrote in 2025: “This is not a DIY project.” The firm says buyers have “well-oiled ‘deal teams’” and that you need a team too.

A banker, also called a sell-side advisor or M&A advisor, works for you. The job is to prepare your company, find the right buyers, run the process and help negotiate. You still make every decision.

Here is a quick test. You may be able to manage with a lawyer and an accountant if:

• You already have a buyer in mind and trust the relationship.
• Your company is small and the deal is simple.
• You have bought or sold companies before.

You likely need a banker or advisor if:

• You want more than one offer to compare.
• You do not have time to run a process and the company at once.
• You have never sold a company.
• The deal has complex parts, such as rollover equity, an earnout or several owners.

This guide explains each role, how fees work and how to choose. It does not recommend any firm.

What does an investment banker do for a seller?

A sell-side banker manages the sale from preparation to closing. The work happens in stages, and good advisors do most of it for you so you can keep running the company.

The marketing step often uses a confidential information memorandum and a non-disclosure agreement to keep your sale private. Diligence covers a data room and a review of your records. Our due diligence checklist lists what buyers ask for.

Who else belongs on your team?

You need a team, and Altair Advisers says you need two: “one to assist with the business and one to assist on the personal side.” The firm describes both groups in its 2025 article.

Altair Advisers says there are many planning opportunities that need to happen before a sale, “sometimes years before.” That is why you should hire your personal advisers early. They can help you plan before the price is set.

Alpine Investors, a private equity firm, notes that its team works “with you and your legal counsel to finalize the terms of a purchase agreement.” In other words, a lawyer on your side is a normal part of the deal. Ask your lawyer to review the letter of intent before you sign anything.

Tax and legal rules depend on your facts. Ask your own tax adviser and attorney. This guide does not give tax or legal advice.

How do investment bankers get paid?

Bankers are paid in different ways, so read the engagement letter closely. Ask your lawyer to review it before you sign. Do not rely on a phone call or an email summary.

The numbers vary by advisor and deal size, so ask for the full terms in writing. First Citizens Wealth reminds owners that “accounting, legal and advisory fees can accumulate quickly, so you’ll want to plan for these costs well before closing.”

Also ask how the advisor’s pay lines up with your goals. A fee based only on closing a deal can push toward closing quickly. A fee based on price can push toward value. Neither is wrong, but you should know the incentive.

How do you choose an investment banker or advisor?

Choose an advisor on experience in your size and industry, who does the work, and references from owners they represented. Titles tell you little. Results and fit tell you more.

Ask each candidate:

1. How many deals like mine have you closed in the last three years?
2. Who on your team will do the work, and who will I speak with each week?
3. Which private equity firms and other buyers do you know in my industry?
4. How do you pick which buyers to contact, and how do you protect my confidentiality?
5. How will you value my company, and what do you need from me?
6. What are your fees, and what happens if the deal does not close?
7. Can I speak with two owners you represented, including one whose deal did not go as planned?
8. What do you do if buyers lower their price after diligence?

Meet at least two or three candidates. Watch how they listen. A good advisor asks about your goals, your team and your timeline before they talk about price.

When should you bring in an advisor?

Bring in an advisor 12 to 24 months before you want to sell, if you can. Early help is cheaper than rushed help. It gives you time to fix records, reduce risks and plan taxes. Our guide on how to prepare your company for a private equity sale describes the work.

Altair Advisers wrote that you need to “engage the PE firm years in advance” if you plan to stay on after closing, because the deal can include a long handoff. Early talks with an advisor help you plan that timeline. See our guide on what to expect after you sell for the other side of the deal.

What does an advisor do about valuation and structure?

An advisor helps you understand what your company may be worth and what offers really mean. They compare headline price with cash, rolled equity and later payments. They also test whether the buyer’s add-backs and EBITDA match yours.

Our guide on how private equity values a business explains the math. Our guides on rollover equity and earnouts explain the pieces that change what you collect.

Altair Advisers offers one useful rule: “If the price does not make sense without the earnout payments, then the transaction does not make sense.” An advisor can help you apply that rule to every offer.

What can go wrong if you skip professional help?

The common problems are a weak price, missed terms and a stalled deal. Altair Advisers warns that these transactions “can fall apart quickly and often do not play out as intended.” A buyer’s deal team does this work every day. You sell a company once.

Typical gaps for owners who go alone:

• Only one offer, so no comparison on price or terms.
• Add-backs that a buyer rejects in diligence, which lowers the price late in the process.
• A letter of intent with exclusivity terms that favor the buyer.
• Tax steps missed because planning started after the price was set.
• Less time to run the company, so results slip during the sale.

None of these is certain, and a careful owner with a good lawyer can avoid many of them. Still, weigh the cost of an advisor against the cost of one of these errors.

What if you want to sell without a banker?

You can sell without a banker, but plan for more work and more risk. Some owners talk directly with a buyer they already know. If you go that way:

1. Hire a lawyer who does deals, not a general practice lawyer.
2. Hire an accountant to prepare for a quality of earnings review.
3. Talk to at least two buyers, so you have a comparison.
4. Ask a trusted adviser to review every offer.
5. Read the exclusivity terms in the letter of intent with care. Our exclusivity period entry explains the term.

Our guide on how to choose a private equity partner gives you the questions to ask any buyer.

Next step

Whether or not you use an advisor, you can start a confidential talk with Capstreet. Read the deal criteria page to see what we look for, then call 713-332-2700, email connect@capstreet.com or use the contact page.