Fabrice LOMBARDO, Founding CEO of GEREJE Corporate Finance, was interviewed by digital media Tech in Asia on how M&A Advisory firms such as GEREJE can add value to funding & development of companies – especially startups (Read the original article).
He summarizes below the points of his intervention:
“GEREJE corporate Finance that I have founded in Singapore in 2008 has been ranked #1 in France & international for fundraising of startups and “smidcap” (small & mid-cap companies).
We start in fact advising for Series A (typical minimum round EUR 3M) up to series C in sectors that we know well, such as e-commerce (fashion, pet food…), digital marketplaces (cashback, travel), fintech… As for more traditional sell-side and buy-side deals, we advise for transactions up to EUR 100M.
We are ourselves now fully digital with our deal flow and exclusive investment opportunities on a secured platform: https://gerejecorpfinance.com/investment-opportunities
During the interview, I have emphasized 8 main arguments that explain why entrepreneurs should hire an M&A Advisor. I also explain why, as a matter fact, individual advisors / local boutiques as well as large corporate banks with advisory services should not be compared with international M&A firms such as GEREJE!
1. When you start your firm, you need at seed stage to have your own capital, or family & friends able to inject “love money”, since there is by nature a lack of professional investors able to fund companies at the beginning of a project.
2. When you almost reach the series A phase, it is key to hire an M&A advisor who will handle the process in a professional way, in order to enable the entrepreneur / founder to :
- Help prepare all the financial & strategic documents that investors will look at;
- optimise the negotiations with potential investors
- avoid unpleasant exchange / discussions with a potential futur shareholder
- focus on her/his company and the immediate results of the business plan announced.
3. Structuring prevails over valuation : hiring an M&A advisor will enable you to optimise the structuring of the deal for your benefit (equity / debt; expected ROI and exit conditions…). Founders are generally obsessed with the valuation of their company but only smart structuring can align the interests of the entrepreneur and the investor, that are by nature divergent.
4. Term sheet / LOI : an M&A advisor will always seek for a legal opinion but will ensure that the legal document are constantly aligned with the commercial negotiations.
5. Meeting a maximum of 10 potential investors : an M&A advisor will confirm a minimum of key meetings with the most serious potential investors and will put them into a healthy competition in order to optimise the negotiations. It is counter productive for founders to meet with dozens of investors and devaluating for the project.
6. Communication: A professionnal M&A Advisor will also assist the entrepreneur to optimise the communication with the existing shareholders and the market in general, in order to ensure the sustained attractiveness of the deal. With a well structured and organised communication, the most relevant VCs / PEs can come to us on their own initiative to get a closer look at the deal!
7. Growth strategy: The M&A advisor will also assist the founder to build a solid business plan in order to optimise the future financial results and ensure the long-term success of the company – keeping in mind that the company’s true value lies in the future (exit).
8. Optimising the momentum : A professionnal M&A firm will enable the entrepreneur to optimise the timing / tempo of the deal, which is key to maintain alive the interest of investors and close a good deal without rushing into possible unfavorable discussions.”