What Elite Investment Bankers Do Differently in M&A

Why investment bankers face a reputation challenge

It’s like any other industry; there’s a range of practitioners with different standards. Our founder and CEO, Paul, always says, "Reputation is everything." How you conduct yourself is paramount. We hold that as our bright line—we won't cross it when it comes to reputation. That’s the basis of how we do business.

The reason people hate investment bankers is that some will push deals—sometimes even bad deals or inappropriate prices—because they’re motivated by short-term fees rather than building long-term relationships. We’re supposed to be trusted advisors. When I got into this business, I had my own doubts. 

In 2006 or 2007, when I was considering a move into investment banking, it was a hot industry, moving fast with a lot of velocity. Balance sheets were driving activity, and lending was thriving.

I kept asking people, "Do relationships still matter? Is the trusted advisor role still relevant?" I’m a bit of a purist. I wanted to be that person who could be relied upon for advice, especially when a client needs help with a problem or concept.

The good news is that trusted advisors do still exist. PJT and similar firms are proof of that. We're not there to lend money or lead an IPO; we aim to be conflict-free and independent, offering the best advice for our clients now and in the future, looking at the lifetime value of each relationship. 

If you’re only focused on short-term gains—closing deals and pushing through transactions—you’ll earn a bad reputation.

M&A can go poorly, and your podcast is a great example of people who know how to do it well. But many others dive in for the wrong reasons, like ego or empire-building, without truly understanding the fundamentals, including integration. 

It’s exciting to do the buying, diligence, and deal announcement, but someone has to implement it, manage it, and deliver those projected synergies.

We aim to be fully aligned with our clients’ success. If a deal goes sour, clients might ask why the banker didn’t warn them. And that’s often where the criticism comes from. But just like any industry, there are different types of people, and that’s something we have to manage daily. My approach is simply to hold myself to a high standard.

Well, lawyers might argue that everyone is charging an appropriate amount for their services. But, yeah, we could compare it to real estate, where transaction spreads can be very attractive. Having bought and sold a property or two, I sometimes wonder what exactly the fee covers.

It’s a contingency-based model, with some risk and reward, but on the point of fees, alignment is crucial for us. We have a business to run, and there are market rates, so if someone is very price-sensitive, they might go to a competitor who charges less. 

I believe in "you get what you pay for." Our fees are often success-based, so we typically get paid only when the client succeeds—when the deal closes.

The role of investment bankers

It may start with answering through my perspective rather than the typical buy-side versus sell-side view. 

When I consider the primary role of an investment banker, I pull back and say it’s about serving as a trusted advisor to the client—whether that’s a management team, a board of directors, or both—and bringing a depth of experience across industry knowledge, M&A, negotiation tactics, and strategy.

Our role is to use that experience to help clients fulfill their duties, obligations, and goals. There are aspects we're more qualified to handle, and others where we partner with professionals, such as lawyers. 

I understand quite a bit about how law intersects with transactions, but I also respect that my legal partners are the real practitioners. We work collaboratively, bringing our combined experience: what's market, what’s worked, what’s failed, and what issues are likely to arise.

At the end of the day, we’re agents, not principals. We facilitate clients' decision-making rather than make decisions for them. Our role is like a catalyst to help clients do their jobs as effectively as possible.

Then, you can break it down into sell-side versus buy-side. We help structure partnerships, raise equity capital, and advise on primary versus secondary equity raises and capital structure. It’s not purely about M&A transactions, but rather advice-based support delivered by a team with deep expertise.

When it comes to responsibilities, there’s a range of tools in the toolkit. For example, if a client needs insight into the industry landscape, we should be able to discuss the players, who’s emerging, who’s struggling, and how the market has reacted to recent transactions. 

Then there's the analytical part, which isn’t just about performing a discounted cash flow (DCF) analysis; it’s about generating meaningful analysis. I always tell my junior bankers it’s not just about calculating numbers; it’s about understanding their significance and helping our clients gain clarity on issues.

We apply proven methodologies, ensuring they’re robust, even in high-stakes situations like court proceedings, and use them to deliver actionable advice. The goal is to go beyond the formulaic tasks typical of a sell-side process. 

For instance, at our firm, a VP might handle execution, but with additional insights, tactics, and advice layered on top. That’s where you get a well-trained senior banker delivering real value.

Building influence and shaping strategy through relationship investment

You've raised two distinct points, so I'll touch on both. First, is M&A a separate capability, or just another tool to drive strategy? For me, it's the latter. 

You often hear about organic versus inorganic growth—companies should have a strategy that encompasses what they want to achieve now, in the medium term, and long term, and they also need to address certain risks along the way.

The question then becomes where to deploy capital. Should they invest in operating expenses and grow organically, or do they need an accelerant? That’s where M&A can serve as a tool to advance the company’s existing strategy.

Your next question is about building client relationships and influencing strategy. The answer is pretty old-fashioned: knocking on doors, making referrals, sending LinkedIn messages, and cold emails. 

When you're a junior banker working on deals, you’re collaborating with counterparts at other companies. Over time, as you do a good job, you build a network and a relationship base, which grows as you move up. Your network isn’t company-specific; it’s person-specific.

This relationship building is one connection at a time, leaving a positive impression each time. The goal is to make sure that interacting with you brings value to others. Think of it like any meaningful relationship—it’s only as good as what you put into it. 

If you’re only taking, it becomes transactional, which isn’t valuable for anyone. But if you’re a giver—sharing insights, brainstorming, providing useful information—then people see value in the interaction.

A lot of my client introductions now come through referrals because people say, “Talk to Nash if you need help deciphering which banker to listen to.” That’s the payoff of years spent investing in my network and relationships.

Tailor advice and introductions for big-company impact

I like to think everyone I connect with is a friend in some way. It’s really the same approach. The key is knowing what’s useful to the person. For example, if I offered you debt pricing insights, you might not find that helpful. But for someone in capital markets whose role is to finance the business, that information could be highly relevant.

It’s about knowing each person’s needs and sharing insights that genuinely benefit them. It’s part of my philosophy—you get back what you put out. If I can help, I will try to.

Big companies have diverse needs. Some people might want guidance on capital-raising execution, while others are looking for introductions to key contacts. 

For instance, just recently, we met with a growth equity investor here, and I brought three of my colleagues whose expertise spans several industry verticals relevant to the investor’s focus. 

We brainstormed ideas, offered names he was partially aware of but lacked connections to, and offered introductions. We could say, “We have a solid relationship with this contact, and it would be a good use of time to connect.” Ultimately, each person's unique needs drive the kind of support and connections we provide.

Example of companies turning strategic advice into growth

I’ll give you one or two examples, starting small. On the smaller side, I got a call from a FinTech contact. He wasn’t reaching out about his own company, but rather about a business he had invested in. He thought it would benefit from meeting some people in the wealth tech ecosystem, which I knew well. 

So, he introduced me to the founder-CEO of that company, and we discussed what he was looking for. I came up with some connections—people I thought he’d enjoy meeting and who’d benefit from meeting him. 

Initially, it was about distribution; he had a specific wealth management product that he was great at building but needed help distributing to advisors and retail investors. We connected him with another FinTech in the wealth tech space, and within a few weeks, they decided to join forces. He ended up selling his company to this other FinTech, and that’s how the Betterment-Makara deal came together. 

We eventually helped facilitate it, but it started simply by aligning their mutual ambitions, especially in the area of automated portfolios for crypto investing.

What began as a need for distribution evolved into a strategic decision to merge, realizing they’d be better off together than alone. This is a clear example of how you can help drive strategy.

Another example spans multiple public companies, where it’s not transactional but much more strategic. Often, they’ll approach us because they’re unsatisfied with how they’re trading. 

They might need help defining their business strategy, discussing how to present or report their business, or exploring new ideas and alternatives to meet board and investor expectations.

That’s how we drive strategy—helping them recognize a deficiency, whether it’s in their trading or operations. They feel it when they’re not optimized. 

Then we work with them on potential solutions, such as M&A or operational adjustments. Across different industries, that’s the nature of the strategic dialogue I engage in daily.

Clients like to know someone cares about what they care about. It goes back to basic principles: independent, conflict-free advice and putting ourselves in the client’s shoes. At this firm, that’s fundamental—it's almost like we could have it written on the wall. We play these roles, and that’s one reason why transitioning from a bulge bracket firm was a natural fit for me.

We’re not limited to just covering a few assigned companies; instead, we cover ecosystems and industries, which means we go wherever our clients need us. Many large-cap clients are tired of bankers who just pitch the mega-deal for maximum fees, instead of talking about what the client is actually focused on. 

Sometimes, clients are in tactical bolt-on mode, sometimes transformational, or maybe they’re just keeping their heads down but need insight on industry shifts to know if they should look up and re-evaluate.

That balancing act fits within our remit—helping them decide how to allocate their time, whether it’s focusing internally or meeting potential buyers or private equity firms. Because we cover companies both large and small, I’ve had the privilege of advising on some of the most consequential deals in financial services. 

For example, I was part of the team that advised Discover on its recent deal with Capital One. Previously, we worked on Legg Mason’s sale to Franklin, a major deal in asset management, and advised TD Ameritrade’s board on their merger with Schwab—huge, industry-shaping deals.

On the other end of the spectrum, I’ve helped founders with once-in-a-lifetime exits, selling to large-cap buyers, where they need to be as equipped to handle the deal as the buyer is to work with them. 

All of this has been within the financial services and fintech sectors. Our ability to operate across this spectrum comes down to flexibility—combining big-firm capabilities with a small-firm feel. 

We’re friends and trusted advisors, but we also have the sophistication to manage the biggest deals globally. That’s essential for truly covering an industry and serving clients wherever they need us.

The advice varies by company, stage, performance, and goals. I can’t give a cookie-cutter answer, like, “Yes, you should be out there courting potential buyers,” just to see if a bid comes in. That approach isn’t useful if the company isn’t ready to be sold, or if market sentiment isn’t favorable.

Sometimes the company has ample runway, so the question becomes, “What should I focus on over the next six months, the next year, or beyond?” Each situation demands specific advice, which takes time, effort, and real thoughtfulness. That’s what makes this job fascinating for me—it’s like a constant Rubik’s Cube, with new problems to solve every few minutes.

Working with public vs. private companies

There’s not much difference in the fundamentals of transaction activity for public versus private companies. At a high level, it's the same—understanding goals, analyzing financials, assessing market appetite. 

Public companies often have better resources, more reliable information, and a wealth of institutional knowledge from experience in M&A. 

Private companies, especially smaller ones, may lack these advantages, though large private firms can resemble public ones in these aspects.

Working with public companies often involves boards or management teams seasoned in multiple transactions, made up of professional corporate leaders who are well-suited for these roles. 

In contrast, with private company founders—who might only go through one or two exits in their lifetime—the stakes feel more personal. Their lifestyle, family perceptions, and future plans can be deeply intertwined with the outcome, creating a need for us to serve as both a financial advisor and a supportive partner.

Other distinctions include valuation approaches. Public companies have daily valuations influenced by market perceptions, while private companies rely on prior marks or funding rounds. 

Despite these differences, our approach remains the same: bringing experience, data, and analysis to help create sound frameworks for decision-making in both public and private contexts.

Role play: Scaling through organic growth and strategic acquisitions

Kison: Let’s test it out, so it’s not all talk. We’re going to role-play one of our catch-up calls. We’ll skip the niceties to save time here. It’s been a year since we last talked, and growth is still strong. 

We had a couple of solid years with 60% year-over-year growth, closing last year with $5.3 million in revenue. Our current run rate is $10 million, and we’re likely closing this year around $8–9 million.

I hired a new COO and restructured the management team, adding a new VP of Sales, VP of Marketing, and CFO—all from venture-backed companies that scaled to $50–60 million. I’m confident they’ll get us to $25 million ARR over the next two years. 

I’m removed from operations now, focusing on strategic areas and networking with CEOs to get a broader view. To be honest, I’m itching to do deals again—I'd love to see us hit $25 million ARR so we’re seen as a platform rather than an acquisition target.

At that stage, with employees holding options, I’d like to recap the business, dilute about 30% as a minority stake, aiming for a valuation of around $250 million with $25 million ARR. If we could introduce $50 million in primary and $25 million in secondary capital, we’d be in a strong position to make acquisitions while sustaining organic growth. 

I’m particularly interested in carve-outs, as I get to connect with senior executives through the podcast, which could help build the company into an M&A platform.

I recently spoke with Nick Schumach, who’s been doing minority recaps with strategics—valuations are good, and they negotiate call options based on milestone achievements. 

I think this could be interesting, especially for a strategic partner on the distribution side. Right now, we’re selling well into large strategics and Fortune 50 companies, but moving into private equity could be our next step. 

We could partner with firms that already have those relationships. So, that’s the update. What do you think? Am I missing anything, or am I off-track?

Avinash: Let me ask a few questions. How much of that $50 million in primary capital would you need to grow from $8 or $9 million ARR to $25–30 million?

Kison: We don’t need any outside funds for that right now. We’re still bootstrapped, with solid cash reserves of about $1.5 million, so I’m confident we can reach $25 million ARR independently.

Avinash: That’s a solid goal—tripling ARR in three years is impressive. I like that you’re set up to achieve it organically, with the team and resources in place. When it comes to raising primary capital, timing and valuation will be key. 

Right now, you’re a bit small for growth equity to make sense, but as you reach $20 million ARR, you’ll enter a stronger position for investors interested in scaling from $25 million to $100 million.

Given that you don’t need the money now, I’d say hold off on talking to investors. It’s better to grow to a point where you’re ready to attract a deeper pool of potential investors who’d support that next big growth leap. 

Raising equity capital on speculation is tough unless you’re in an industry where that capital immediately impacts your product. Here, you’re looking to raise $50 million primarily for M&A, not directly investing in the business itself.

My suggestion: first, build out your M&A strategy and identify specific targets. Then, if you need capital to execute on those deals, approach investors with a clear plan. They’ll want to see detailed information on your M&A pipeline, acquisition prices, and integration strategy. Without that, any projections you make might be discounted.

If M&A is going to be a core growth strategy, treat it like a sales funnel. Build your target list, reach out, and initiate conversations. Use your network to spread the word that you’re looking for. Just be mindful of filtering out the less qualified leads.

Kison: I think that’s it. Let me dig one level deeper just to take this further. I started building a pipeline and pursued a direct competitor, learning a lot in the process. It became clear it would be hard to predict churn and challenging to integrate without impacting our organic growth. 

So, I low-balled them; it didn’t feel right to offer a competitive value. Most of these deals I’m seeing are distressed, stagnant, or declining, so I developed a new thesis around consolidating data room products.

We have a clean, simple product with firm room, and I thought if we could acquire some of these older, 10-plus-year-old companies, we could migrate the customer base, improve their experience, and achieve cost synergies through a single platform. 

But as I built the pipeline, I realized there’s a gap: a lot of little, low-quality $1–3 million companies, but then it jumps up to $20 million, where the big players are already consolidating. There weren’t as many suitable targets in the lower range as I thought, and many don’t offer a clean enough product for a lift-and-shift approach.

I’m still considering doing some of these smaller deals just to build experience, but my interest has shifted to carve-outs. I lost one deal to a competitor, and it got me thinking: instead of competing for lower-quality deals, why not leverage my relationships and focus on carve-outs? 

The best results I’ve seen in M&A are from predictable roll-ups or well-executed carve-outs. Carve-outs can be tricky, but they can unlock significant value, so we’re starting to build a pipeline there.

Avinash: Exactly—test and verify. Develop a thesis, go out and test it, then adjust if necessary. The scientific method applies to deal frameworks too. Part of this job is helping clients decide not only when to transact, but also when they shouldn’t. The key caution here is not to let the urge to do a deal lead to a bad one.

Why do small deals? One, they’re often less competitive; two, valuations can be attractive; three, they fit your capacity; and four, they demonstrate you can successfully complete acquisitions. That track record strengthens your story when you later seek funding for larger deals.

Kison: That’s my goal—to complete two deals before we hit $25 million ARR so that when we raise funds to continue acquisitions, the story is stronger.

Avinash: Exactly. But if you end up doing a bad deal just to satisfy those goals—say, acquiring a company with a weak client base attached more to the founder than the service—you could end up managing two platforms, which you didn’t want. 

That could mean the money would have been better spent on operational expenses or sales. It’s essential to use the right decision framework to ensure these deals genuinely add value. I think you’re on the right path; you see the opportunities and are acting on them. Now, just make sure each deal makes strategic sense.

Leveraging investment bankers to identify strategic carve-out opportunities

One thing you could do is clearly outline what you're looking for. That way, when I talk to companies, it stays top of mind, and I can bring up potential matches as they come up. This awareness helps because we gather information on needs and goals from a wide range of people, then look for natural fits where possible.

Corporate development professionals are very busy, especially those at well-capitalized companies, as they’re flooded with inbound requests. Carve-out funds, for instance, are constantly reaching out. 

So, if you know a corporate development person well and understand their business lines, you can identify areas where collaboration might make sense. But you also need to assess whether they’re even looking to make a move in that area. 

You’d want to present an option that’s more attractive than their current situation with the business. If the conditions align, you can have a meaningful conversation; if not, you risk either wasting time or needing to raise your price to make it compelling.

Some companies do fine by simply buying good deals without full integration. They cut costs effectively and capitalize on timing—buying when a company needs an exit and market conditions aren’t ideal for high multiples. 

There’s a difference, though, between an opportunistic buy and a strategic acquisition where you can integrate, cut costs, or drive revenue growth. Ideally, you’d find deals with a bit of both, but generally, they’re two different approaches.

Since you're focusing on B2B SaaS, finance-related themes, and collaboration tools, especially within secure, high-stakes transactions like IPOs or M&A, I’ll keep these criteria in mind as I speak with people.

Building selective PE relationships for carve-out deals

There’s an entire range of private equity firms tailored to different company sizes. Some focus on businesses with $1–5 million in revenue, others from $10–30 million, and so on. So, if you’re considering Blackstone for a $20 million acquisition, that’s not the right fit. 

However, if you’re targeting deals that might need outside capital, it’s smart to develop a few relationships now. This way, you have contacts who know your business and understand that you’ll reach out—not when you need capital immediately, but when you find a high-return transaction where you need a financing partner.

It’s worth spending time with a select group who understands your story and the capital needs specific to your size and growth phase. You can even ask for referrals to find the right partners. As you consider this, think about whether they have the right type of capital for your needs today, tomorrow, and further down the line.

Evaluating the right private equity partner

If they’re not willing to answer your questions, it’s on them to prove they’re a worthwhile partner because you’re essentially inviting someone into your business. Taking capital from a private equity or growth equity firm is a two-way evaluation. 

They’re assessing if you’re a good steward of their capital, and you’re deciding if they’re the right partner—not just in good times, but when challenges arise.

It helps to ask them directly: What’s their unique advantage? Is it purely financial, or do they bring operational know-how? Who are some of the entrepreneurs or founders they’ve worked with? Talking to their current or past portfolio companies can reveal a lot. If they’re not open to that mutual dialogue, you’re likely better off moving on.

On the outbound side, finding the right PE firms can be challenging at the lower end of the market since there’s less transparency than with larger firms. Discovery is half the battle here. 

Many private equity firms in this range don’t have the directory-style visibility that high-revenue companies do. But a firm with a good reputation shouldn’t be hard to find—if they’re willing to take a moment to engage, that’s a positive sign. If they don’t, move on; there are plenty more options.

Warm introductions from other founders and CEOs are also incredibly valuable. It’s always good to ask for referrals from those who can validate a firm’s reputation.

The importance of buyer-led M&A integration planning

There’s always a battle for controlling the process, whether it’s pre- or post-LOI, and exclusivity just adds another layer to that. A buyer has specific criteria they need to satisfy to feel comfortable with the deal. 

They have to balance moving fast enough, with enough conviction, to stay competitive with the seller’s process—whether that process is banker-led, managed by the board, or set up by management with an allotted time frame.

It’s essential to check off your priority items while staying competitive. In some cases, you might have a bilateral situation where you can take your time, which is ideal. When the seller is more committed to the buyer and you’re in exclusivity, you can make it clear that certain aspects need focus to reach signing and beyond.

M&A is a muscle—some companies are still building it, while others have it well-developed. It’s not a single muscle; it’s more like the human body, a series of muscles with primary and secondary functions. 

Integration is one of those muscles that allows you to do due diligence on integration, develop an informed point of view for the deal process, and anticipate the costs, timelines, and synergy expectations. If integration is important to your organization, make sure you develop that muscle to execute smoothly, efficiently, and quickly.

Sellers may sometimes hold back, unwilling to get into integration details until a certain point. But that approach can be short-sighted since the more comfort you have with integration, the better you understand synergies. 

For sellers, that means you have a more realistic view of where value can emerge, elevating the deal’s potential. Both sides should be motivated to identify and capture synergy.

When a buyer wants to lead the process, especially in a competitive scenario, it usually comes down to three factors: speed, value, and certainty. One or two of these typically rise to the top in importance for a seller. 

If you want to take control of the process, show up with the elements that matter most to them. Understanding why they’re selling and what they value—speed, certainty, or maximum value—gives you the leverage to drive a more buyer-led approach.

Can you get to a close? Certainty is about knowing there won’t be excessive conditions or risks attached to transacting with me. Speed and certainty mean you’ve handled your fundamental issues up front. 

Once you’re in exclusivity, the buyer gains more leverage because the seller has already committed, letting you focus on the most important details. Sellers do retain leverage—the ultimate power to walk away—but by agreeing to exclusivity, they give up some options as other potential buyers question if it’s still worth their time. 

Once you’re in that exclusive position, it becomes a buyer-led process by definition because the seller just wants you to complete your work as quickly as possible.

Some companies operating roll-up strategies have a streamlined approach: they come in with established deal structures, pre-set valuation parameters, and integration plans, making them attractive because they move quickly, offer favorable terms, and have post-deal integration covered. 

This consistency builds confidence in the transaction, especially for sellers who might continue to participate in the pro forma.

Roll-ups aren’t necessarily banker-driven; the strategy often depends on the company’s discipline. When a company plans to pursue high-volume acquisitions, they need the right integration, valuation, and targeting processes. 

The best acquirers have their financing, advisors, and back-end integration teams ready, which makes execution smooth. Companies that talk about doing roll-ups without these components in place typically aren’t ready for it.

In financial services and FinTech, I see significant buyer demand. We just moved out of a market environment where valuations were heavily seller-friendly, especially with the influx of equity capital into FinTechs, creating a frothy market. 

As valuations return to a more normalized level, I expect a market shift with increased buyer power, especially in sectors like mine, though every industry will see its own variation of this shift.

Finding the right advisory partnership

Let me plug PJT a bit here—we’re a true partnership. When you work with us, you don’t just get one person. Depending on the situation, we bring in the right people, creating a senior-heavy deal team with the right disciplines and backgrounds. 

No one is faking it here; you aren’t just handed off to a banker in a particular segment who may or may not understand your needs. Especially in financial services and fintech, there’s so much crossover between different business models now. 

You have insurance companies moving into asset management, payments companies getting into lending, consumer fintechs working with traditional finance players. Sometimes, that level of expertise can’t be provided by just one person.

The key is to find an advisor that can adapt to what you need rather than trying to force your needs to fit a specific brand or company. It’s all part of the same perspective—going where our clients need us to go. 

That’s how we’re set up, and I think it’s a way to address some of the reputation issues in the industry. Sometimes, people are talking about things they don’t fully understand because their incentives push them to. We’ve removed that; we’re a traditional, pure partnership, so we all work together.

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