As a professional advisor and investment banker, the most important aspect of an engagement is managing the client’s expectations. In fact, it is even more crucial to conduct a thorough interview with the prospect to set those expectations.
What should you identify and clarify in the interview? Here are some of the key issues:
- The reason(s) for and level of commitment to an exit or capital sourcing and their rationale behind it. The necessity of a reasonable retainer is foremost an indicator of the prospect’s level of intent.
- The explanation of the potential length of the process and the due diligence participation needed from the company.
- The prospect’s desired value, the minimum acceptable, and whether either is a deal breaker.
- When there are bumps in the process, their trust in our advice and counsel to correct the course.
- How long it will take them to provide current, accurate financials and the state of the accounting systems in place.
- Can they easily explain their unique selling proposition and the near-term revenue and profit growth.
- How often they want communication of our progress, and what that entails.
- Desire to eliminate selling to competitors, or instead delay contact with them long as possible until later in the process.
- Can they easily explain any company problems and/or deficiencies and how those will be resolved.
- Since we are interviewing each other, identify any vibe or constraint present that does not seem warranted.