Your Guide to Investment Banking Advisory

Managing your or your company’s financing can be a challenging endeavor — that’s why many often turn to investment bank advisors. These financial specialists advise companies and corporations on how to manage and raise money. This could include advice on issuing stock, floating bonds, negotiating acquisitions, or arranging the sale of a company.

This article will explain everything you need to know about investment banking advisory and how they could help your company.

What is investment banking?

Investment banking involves organizing large, complex financial transactions like mergers or initial public offering (IPO) underwriting. Financial advisors are responsible for raising money for companies, including underwriting the issuance of new securities for a corporation. They may also manage a corporation’s IPO and give guidance on mergers, acquisitions, and reorganizations.

How can investment banking advisory help a company?

Investment banking advisors are responsible for handling several financial activities undertaken by a company. They can help a company with the following:

Arranging financing

An investment banker can help arrange financing for a company’s projects. They can plan the bond issuance, price it appropriately, complete the U.S. Securities and Exchange Commission (SEC) documentation required to issue the bonds, and help market them to buyers.

Equity financing

One of the most cost-efficient ways for a company to grow is to sell its bonds or stock. An investment bank advisor can arrange the sale of stock or equity financing.

Suppose a startup company wants to raise money for its expansion by launching an initial public offering (IPO). It would hire an investment banking advisor to prepare a prospectus for potential investors explaining the offer and associated risks.

The offering would then need to be managed as it is marketed to investors and gains approval from the Securities and Exchange Commission. The investment banking advisor would also need to price the stock accordingly for the company, so they are generating money for the startup.

The investment bank advisor would handle this entire process for the company.

Underwriting deals

Investment bank advisors are often involved in underwriting deals for their clients. This means they take on the risk involved in buying the shares outright from issuers and then selling them to the public or institutional buyers. They sell the shares at a markup to generate profit for companies.

In most instances, an investment bank advisor will work with a group to underwrite an issue so it is spread out among several people. They may also act as a go-between and market the deal but not take on the underwriting risk.

Arranging private placements

Some companies do not want to go public. Investment bank advisors can help companies who wish to raise funds through private placements rather than through stock. In these instances, the investment bank advisor is expected to have contacts and the credibility to get a sale done.

Negotiating mergers and acquisitions

If a company is planning on acquiring or merging with another company, it can be a long and drawn-out process. Investment bankers play a prominent role in the process, particularly when it comes to negotiating a fair price. Mergers and acquisitions can involve lengthy battles on both sides as they evaluate a series of offers and counter-offers.

Reach out for expert financial advice today!

If you’re in need of an investment bank advisor or personal financial guidance of any kind, don’t hesitate. Reach out to our experienced team at Miser Wealth Partners today. As premier financial advisors in Tennessee, we’re ready to serve you and your board to the best of our abilities.