Thursday, July 03, 2008

Is an I-Banker’s Help Really Worth That Much?

We hear plenty of investment banker abuse.

“They always shop the same acquisition candidates.” “They promise you an IPO price to get your business – and then keep their trading clients happy by cutting it in half when the deal is about to close and you can’t back out.” “They take too long and charge too much for raising private money – if they ever raise it.”

So, when our advertising colleagues on the other side of our Chinese wall here at FDC/Windhover did a poll on the subject, we were surprised to find out that i-bankers were rather more liked than we expected. Between a quarter and a third of our respondents – 109 med device, biotech and pharma biz dev execs, and a smattering of VCs (along with a few consultants) – thought that when it came to bringing them M&A opportunities, structuring deals or raising money, i-bankers were either “very helpful” or “invaluable”. Only in “raising money” did an i-banker’s negatives outweigh their positives: 47% thought they were “not at all helpful”. (click chart to view larger)
Oddly enough, ibanks got best marks for something that, theoretically, our post-Spitzer ibankers are supposed to have nothing to do with. Our respondents love equity research – 55% found it very helpful or invaluable. I-bankers can no longer promise coverage for their clients – but those handy reports do make very nice leave-behinds on sales calls.

Image from flickr user Turkinator used under a creative commons license.

1 comment:

Matt Schiller said...

Nice article Roger. That chart is very hard to read, though...