07 May Why Most Investment Banks Suck at Marketing
We help businesses sell and divest. In some cases, we help them grow before they sell. That’s what we do, that’s what we’re good at. In doing so, we typically must work hard at finding our own investment banking deals. Luckily, doing so isn’t always the easiest thing in the world. Otherwise, there would be hundreds of would-be business brokers, M&A advisors and investment bankers clamoring to pitch their services. In short, there’s a natural barrier-to-entry. Other unnatural barriers were, at least until recently, erected by lawmakers. Luckily other barriers exist in this industry that are directly the result of the way such institutions have been run for a very long time.
- Most banks are run by financial execs. Sorry, but most financial execs lack the requisite creativity.
- Most M&A advisors and investment bankers rely on old models for outreach.
- More buyers than sellers. The supply/demand conundrum is all out of whack.
If you own, operate or work with an M&A advisor or investment bank, we can certainly work with you, but in most cases, we like to take our own deals. That’s where the money is. Tell you what, if you had the skills that Bill Gates did when he dropped out of Harvard to start Microsoft, would you have trusted the quality AND the sales revenue to a outsourced developer or outside partner or affiliate? There are cases where outsourcing makes sense, but when it comes to some of the most difficult financial and managerial negotiations–and particularly those that directly impact on your company’s revenues, outsourcing it just doesn’t cut it.
The same holds true for most M&A advisor/client relationships.The relationship-driven business of investment banking and traditional mergers and acquisitions for the middle market is changing very quickly. Luckily, there is a Democratization of Capital coming in various sectors in finance. In part to changes in regulation, but mostly due to changes in technology. As the model changes, I suspect so will the way bankers and financiers do their business will also change.
Connections between tech, marketing and finance will continue to blur. As they mesh and integrate, the experts in all three fields will–of necessity–be forced to adapt. That adaptation will require a broader and deeper understanding of what makes all three fields tick. Marketers will need to understand finance, financiers will be driven more and more by technology and technologists must find a way to make big data work for business.
Traditional marketing in finance was all about “who you know” in the “in” crowd. Today it’s more about “how do we get scale?” and “how do we reach more people in their various niches more effectively?” That’s not a question those in finance had been forced to ask in years past. That is quickly changing.