Finding an Investor With an Adviser: Process, Role and Costs

An investor search is the structured process by which a company identifies and selects a provider of capital or an equity partner. An adviser runs that process: defining the objective with you, preparing the company, approaching suitable investors discreetly and negotiating the terms. The task is not to find any source of money, but the right one, on terms that hold. The basis for that is a maintained investor network with access to the active providers of capital across the DACH region.

How a structured, discreet search works in practice is described under finding an investor.

Owners looking for an investor are rarely looking only for capital. What they need is a partner whose objectives, time horizon and intended role fit the company. That is precisely what makes the search a managed process rather than an introduction service. What follows sets out how the search runs and what an adviser contributes.

What an adviser contributes to an investor search

The core of the work is not a single contact but genuine competition. An adviser identifies several suitable investors, approaches them discreetly and brings them into a structured process. Only once several serious parties are at the table do you have a real negotiating position — on price, on the size of the stake and on consultation rights.

Then there is the preparation. An investor decides on the basis of documents and figures. Where these are unclear or incomplete, confidence falls and the valuation falls with it. The adviser makes sure the company presents itself as it is — robust and capable of being followed.

How we establish that value within a mandate is described under company valuation.

How an investor search runs

The process follows clear phases that build on one another.

Phase	What happens
1. Defining the objective	clarifying the capital requirement, the intended size of the stake, the investor role and the time horizon
2. Preparation	producing the documents: an anonymous teaser and an information memorandum
3. Investor selection	building a long list and a short list of suitable investors — by strategy, not by volume
4. Approach	discreet contact, with a confidentiality agreement (NDA) before any detail is disclosed
5. Conversations	exploratory talks, indicative offers, selection of the serious parties
6. Review	due diligence: the investor examines figures, contracts and risks
7. Completion	negotiation of the investment and shareholders agreements, and the investor coming in

The sequence resembles a sale process; the full route is shown in the process of a company sale. The difference is that the end point is not necessarily a full handover but frequently an investor coming in alongside you.

What kind of shareholding results

An investor search need not end in the sale of the whole company. Depending on the objective, a minority shareholding may be sufficient, or a silent partnership with no voting rights given up, or growth capital that lets you expand without relinquishing control. Whether a strategic partner or a financial investor is the better fit is set out in strategic buyer or financial investor.

What the advice costs and what to watch for

The usual arrangement combines an ongoing fee with a success fee on completion. The orders of magnitude and the models are explained in what does an M&A adviser cost?. What matters most is independence: an adviser who pursues only your objectives negotiates harder for you than one who also earns from a particular group of investors. How to recognise a good adviser is set out in choosing an M&A adviser.

FAQ

What does an adviser do in an investor search?

They run the entire process: defining the objective, preparing the documents, selecting and discreetly approaching suitable investors, managing the competition between them, and negotiating the terms through to the investor coming in.

How does an investor search run?

In phases: clarify the objective, prepare the company, select suitable investors, approach them discreetly, hold conversations and collect indicative offers, complete due diligence, and finally sign the contract and admit the investor.

How long does an investor search take?

As a rough orientation, several months from preparation to the investor coming in — depending on the state of preparation, the size of the company and the number of serious parties.

What does an adviser for an investor search cost?

Usually an ongoing fee plus a success fee on completion. The precise level depends on the scope of work and the size of the transaction.

Do I have to give up my company entirely when an investor comes in?

No. Depending on the objective, a minority or silent shareholding may be enough, or growth capital without relinquishing control. The size of the stake is part of the negotiation.

Why does an adviser approach several investors at once?

Because competition is what creates a negotiating position. With only one interested party there is nothing to compare the terms against; with several serious parties, price, stake size and consultation rights all improve for the seller.

Which types of investor actually take shareholdings?

Which types participate in practice and how they are approached is set out in investors seeking a shareholding.

If you are considering an investor search, speak to IGCP Capital Partners in confidence — independent and discreet. → igcp.at