Should we engage an M&A advisor or investment banker three years before our planned exit, or should we wait until we are ready to build the confidential information memorandum?

Question

Tyler Smith · Accepted Answer

Do not hire an investment banker on a formal transaction retainer three years out. Investment bankers are transaction specialists built to market a business, run an auction, and close a deal over a six to nine month window. If you bring them in too early, you burn retainer fees and create transaction fatigue across your leadership team.

However, you should build informal relationships with two or three reputable M&A advisors three years early. Invite them in for confidential exploratory conversations. Ask them what buyers in your sector are penalizing today, what deal structures are standard, and what strategic capabilities command premium multiples.

Use their feedback to shape your long-term operational priorities on your V/TO. In the meantime, work with an EOS Implementer and an exit readiness specialist to fix the operational and leadership foundations.

Focus your internal energy on removing key-person dependencies, standardizing Core Processes, and stabilizing gross margins. When your operational house is fully exit-ready and your trailing twelve-month numbers reflect institutional quality, you can engage the right M&A advisor to package and market the company from a position of absolute strength.