1000banks vs Investment bank

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1000BANKS

FEES 

$0 retainer, $0 monthly fee, $0 breakup fee, $0 listing fee. A low success fee is paid only by a buyer. FREE for targets.


 PROCESS 


  1. Search listings, pick a target 
  2. Sign an adhesion agreement 
  3. Begin M&A negotiations/Sign Term Sheet/Merger Agreement 

                                          ---- or repeat steps 1 and 3, while paying $0

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INVESTMENT BANK

FEES

Retainer, monthly fee, breakup fee, success fee, paid by buyer or target.


PROCESS

  1. Research IBs 
  2. Negotiate with several IBs 
  3. Get retainers from 2-3 IBs 
  4. Negotiate retainer fee 
  5. Negotiate monthly fees 
  6. Negotiate success fee 
  7. Negotiate breakup fees
  8. Choose an IB, bear responsibility for the pick 
  9. Send the retainer to legal 
  10. Negotiate the retainer
  11. Ensure that the transaction is disinterested or get a BOD vote. 
  12. Sign the retainer 
  13. Pay the retainer amount 
  14. Pay monthlies 
  15. IBs begin compiling a list of targets
  16. IBs run the list through the buyer, get approvals for each
  17. IBs begin reaching out to target(s) 
  18. IBs go back and forth between buyer(s) and seller(s) 
  19. Negotiate NDA 
  20. Sign NDA 
  21. Begin M&A negotiations/Sign Term Sheet/Merger Agreement 

----or repeat steps 13-16, while paying monthly fees

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why 1000banks

Since M&A decisions are hardly a daily function of banks' management, the latter may require specialized expertise and manpower and therefore seek counsel from investment banks. The skilled-advice hypothesis is that investment bankers (IBs) help clients identify synergistic targets and negotiate favorable terms. If IBs indeed provide valuable advice, it is reasonable to expect that the highest-quality advisors lead to the best outcomes. However, existing research generally fails to find such a relationship.


In targeted buy-side deals, an IB, according to bankers themselves, is close to useless – because no matter how well an IB can “negotiate,” ultimately the seller has all the leverage. In most targeted buy-side deals, the IB’s true role is to provide the financing. An IB “analyzes” the situation and provides recommendations in the form of how much and what kind of terms they should negotiate for – as well as what the financing should look like (how much debt they should use, the number of tranches, interest rates, etc.). Financing is priced separately from the M&A success fee. 


On 1000BANKS, upon reviewing it’s instant, free and self-searchable Fairness Opinion based on the sold and currently listed offerings as compares, even targeted deals often switch to broad, due to abundance of supply.

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