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What makes a good advisor?

By Alan Zielen

There are many consultants, advisors and bankers that make up the corporate finance arena – thousandths, if not millions. So many to choose from, so many to screen and vet. Of course it is impossible and unrealistic to screen through everyone of them until you have found that magic match, but it is possible to find that diamond in the rough that is right for you. Here’s how to screen through the good, bad and the ugly…

You need:

  • Someone that understands your business model

  • Someone that understands your industry and your market (and even local market)

  • Someone with prior experience within your industry, or better yet, even “hands-on” experience

  • Someone that “tells you how it is” rather than someone that is afraid to correct your wrongs

  • All options need to be laid out, regarding all potential financial products and terms

  • Someone that understands all possible options that may be available

  • Someone that has strong financial analytical and valuation skills

  • Someone that has demonstrated some sort of formal commitment towards you and your company

  • Someone that can actually showcase some of their past work, able to give “appetizers”

  • Someone that helps you prepare for the capital markets, organizes your financials, helps create attractive material to “showcase your business” in the best light

  • Someone that can give constructive criticism regarding use of proceeds, business strategy, or even bring attention to, or address potential economic or macro-economic factors that may soon affect the business.

How some intermediaries have given the industry a bad reputation:

  • Over-promising and under-delivering

  • Inability to properly structure deals correctly

  • Charging upfront excessive retainer fees while producing absolutely nothing

  • Someone who does not make your needs over theirs a first priority

  • Completely disappearing and leaving you in the dust with no closure (it happens quite often actually)

  • Someone who takes no interest in learning your company's operation or business model

  • Someone who is only interested in doing a transaction and shows no regard for any potential post-transaction issues

  • Most advisors/intermediaries are in it for their own self-interest, having very little or no interest in actually negotiating aggressively on fees, structure and terms (some don’t even know or fully comprehend some of the legal jargon that could be potentially optimized in favor of the borrower)

Our approach is unique:

  • We will work with you to design the most optimal capital structure that will increase firm value

  • We will give constructive criticism when necessary

  • We will always be realistic about our outlook

  • We will work with you on sourcing and constructing the most appropriate debt structure and terms that will match the cash-flows of the asset

  • We will help you on devising a strong and credible financial model that will appeal to lenders and investors, and will be able to simulate various possible best case/worst case scenarios, expected cash-flows and expenses, along with realistic revenue assumptions and market forecasts

  • We also demonstrate the ability to provide in-house financial reporting, bookkeeping, cash-flow and working capital management advisory services to fully optimize your company’s financial situation and strategy, and to keep everything organized under one single roof

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