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Whether your dream is to break into the front office of a leading bulge bracket investment bank, work as a middle market M&A professional, or launch your own M&A firm, Investment Banking University is the path forward.

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Front Office Investment Banking Process

In order to build a career in investment banking, it is essential for the individual to know and practice the Front Office Investment Banking Process. Whether one’s career track is in a bulge bracket investment bank, middle market M&A group, or as a lower middle market M&A advisor, it is crucial to know the primary […]

How to Become an Investment Banker?

In order to become an investment banker, you first want to clarify whether you want to work on the sell-side for a few years and then move to the buy-side or pursue a career in investment banking. The skills needed to be successful as an analyst/associate at an investment bank are different than those needed […]

What Do Investment Bankers Do?

Since M&A is the main product in investment banking, I will provide an answer in relation to this. Investment bankers originate, mandate/target match, and structure M&A deals. After establishing one’s coverage and then building an index for the vertical and sub-vertical as well as establishing relationships with strategic and financial buyers within the vertical and […]

Front Office Investment Banking Training

Investment Banking University makes it easy to learn the actual capabilities of the client facing investment banker. Currently, all investment banking training is dedicated to teaching deal support skills like financial modeling and valuation. This leaves students and professionals with a skill gap between themselves and what it actually takes to originate and do deals […]

Running the Boutique Investment Bank/M&A Firm

In building AltQuest’s initial book of business, we sent over 2,000 emails to our initial coverage group, industrials/manufacturers. The response rate was approximately 2%. Of those that responded approximately 50% were interested in seller and 50% were interested in taking an offer on their business. Of those that were interested in selling their business, approximately […]

How to Build a Boutique Investment Bank/M&A Firm

At Investment Banking University, we are often asked , “How to build a boutique investment bank?”, so we created a methodology for doing so consistent with that which built AltQuest Group (www.AltQuest.com), the middle market boutique investment bank. This methodology is known as the Boutique Investment Bank Methodology which goes as follows: Decide on IB […]

Minimum Financials to Do a Deal

The minimum amount of financials to get a deal done is the following: Last three years P&L Year To date (YTD) P&L Last Twelve Months (LTM) adjusted EBITDA to price an offer This should be easy to get if the owner has QuickBooks or another accounting software.

Due Diligence

LOI to accept price and terms. Due diligence is open book time where buyer investigates the business to see if it is how the seller represented it. SMB due diligence: Standard asset purchase agreement is provided by M&A professional and contingencies for due diligence placed in the contract. A buyer agrees to purchase the company […]

Purchase Agreement

After the strategic or financial buyer decides to draft an LOI and proceed with an acquisition of a given target, the purchase agreement will need to be drafted. In the LMM, the investment banker may draft the agreement himself/herself, but as transactions get larger, M&A attorneys will be involved and take the lead with the […]

Letter of Intent (LOI)

The LOI is non-binding except for a few terms: Non-disclosure No shop clause LOI states terms of what the deal will look like and then allows the buyer time to verify the information presented and creates a roadmap for attorneys to craft the final purchase agreement. Price and structure should be settled in the LOI […]

Dealing with Buyers in the Lower Middle Market/Middle Market

When waiting for financials from the seller, go for a buyer/seller call in the interim to move the process forward. If the buyer wants to wait for financials, then request that the buyer write out their questions of the seller in an email and then forward these questions to the seller. This should set up […]

Dealing with Sellers in the Lower Middle Market/Middle Market

Most sellers that are interested in having a discussion are 1 to 5 years away from actually selling. They either are waiting for a strategic buyer or simply need to grow a few more years to hit a target valuation to be in line with the lower middle market/middle market valuation spectrum: $500k to <$1m […]

M&A Process in the Lower Middle Market/Middle Market

From Origination to M&A Execution Once the investment banker has originated 8 to 10 multimillion dollar listings, one should transition from origination to M&A execution process creating a shortlist for each deal (10 in the shortlist). The investment banker should concurrently prepare the marketing package which includes the teaser and the executive summary. Once the […]

Deal Structuring

After matching a financial or strategic buyer’s mandate with a target, landing the M&A engagement and building & executing on a buyer list, it is up to the investment banker to work with the buyer and seller to structure a deal. Deal structures initially involve a rough range of valuation to make sure that both […]

CIM (Confidential Information Memorandum)

After creating the teaser, the investment banker goes into greater detail in a marketing document called a CIM. This document is distributed to buyers after the teaser and is for the serious buyers to do an in depth analysis of the target. The CIM is the primary marketing document associated with sell side M&A. The […]

Building the Teaser

After finding adjusted EBITDA and determining valuation, the investment banker can build the marketing material for the target company which includes a teaser and a CIM. The teaser is a summary of the client’s key selling points. The teaser can be broken down in the following manner along selling points including: Overall financial profile: three […]

Determining Valuation in the Lower Middle Market/Middle Market

After arriving at adjusted EBITDA, the investment banker will determine public comps and extrapolate a multiple for the target company adjusting for size of the company. From there, precedent transactions will be spread to determine a mean multiple. Finding the midpoint of the valuation methodologies can be used for determining valuation but the range is […]

Finding Adjusted EBITDA

After receiving the financials for the target, the investment banker must calculate adjusted EBITDA. EBITDA and Total Owners Benefits (TOB) are proxies for cash flow but not true cash flow of the business as there will be CAPEX and working capital deducted to get to true cash flow. Total Owners Benefit adds back taxes, interest, […]

M&A Engagement Letter

In order to get paid, investment bankers have to land the engagement. Once the fee is agreed upon, the investment banker puts in writing the fee in something called an engagement letter. The AltQuest Group engagement letter looks like the following:

M&A Success Fee

In the lower middle market to middle market, most investment bankers work on a success fee basis meaning that they only receive compensation on a deal when it actually goes through and closes.

M&A Fee Methodology

It is important for the investment banker to have a strong understanding of fees so that the In the lower middle market to middle market, fees usually are the following: 6% for <$5M TEV 5% for $5M-$7M TEV 4% for $7M – $10M TEV 3% for >$10M TEV As you move higher than $2M in […]

Mandate/Target Matching Methodology

After determining one’s coverage and then initiating coverage in the form of index-building, it is important for the investment banker to then begin matching investment mandate’s of strategic and financial buyers to targets within the investment banker’s coverage. The Mandate/Target Matching Methodology is the following: Build relationships with strategic and financial buyers in a given […]

Building the Pitchbook

As mentioned earlier, the pitchbook is an origination document meant to win sell side business for the investment bank. There are two main types of pitchbooks that are created. Introduction & Market Overviews– Introducing the investment bank and giving market updates to potential clients. This is origination work and is associated with then allowing you […]

M&A Origination Methodology

M&A origination requires coverage, relationship-building & pitching. You first need to establish your coverage of a given industry and sub-sector to develop your awareness and expertise. From there, you need to go about building relationships with both strategic and financial buyers to get an idea of the buy-side. This includes obtaining investment mandates which will […]

Vertical & Geographic Coverage

When building out your coverage for your investment bank, if your coverage begins at $5M revenues on up in manufacturing, then there should be about 1,500 firms per state. AltQuest Group’s coverage includes California, Texas, New York where we give periodic updates to our coverage companies on the M&A marketplace including multiples, margins and M&A […]

Rolodex Building

As an investment banker it is important to establish relationships with the strategics in your coverage group as well as relationships with targets and their potential buyers. After building the index containing relevant strategics, one should go to RocketReach.co and find the email addresses for each of the CEOs, CFOs, and/or corporate M&A department head […]

Pitch Book

When we have built out our industry indices and began coverage, we can begin to pitch our M&A services to particular businesses to win M&A mandates. This means building a pitch book for an individual target.

Coverage Marketing Material

When maintaining coverage of an industry or sector, one prepares a newsletter to be send to prospective sell side clients in the industry or sector. Investment bankers use the index information to create this newsletter. The newsletter is about 2 to 6 pages. For example, our AltQuest software industry coverage has produced the following newsletter […]

Financial Data Sources

If you are at a larger investment bank, you will have various paid data sources at your disposal. These include: Bloomberg CapitalIQ FactSet Mergr For those that are not at a larger bank, one can use the free sources of financial data including: Yahoo Finance Google Finance Yahoo Finance and Google Finance get their EBITDA […]

Index Building & Benchmarking

Regarding the vertical index and sub-vertical index, the investment banker ultimately tracks trends in: Growth rates Margins Multiples The investment banker takes the index and establishes tiers which turn into peer groups. This is why we pull comps, to build an index and benchmark against the comps. The indexing and benchmarking that is done for […]

Investment Banking Coverage Methodology

First, the investment banker is going to choose what size of companies he/she is going to cover (ex. public co’s, middle market, lower middle market). From there, the investment banker chooses an initial vertical and sub-verticals to cover. With AltQuest Group, our initial coverage groups were the following: 1. Manufacturing 2. Software 3. Business Services […]

Lower Middle Market & Middle Market M&A Multiples

It is crucial for investment bankers to understand the M&A marketplace in the middle market and particularly for the industries that they cover. In M&A, everyone goes off of multiples of adjusted EBITDA. It is important for the investment banker to have a strong understanding of multiples in the M&A marketplace in general and then […]

Buyer Profile: Strategic Buyers

Strategic buyers come in at ~$500k of EBITDA and provide a valuation floor of 5x EBITDA.

Buyer Profile: Middle Market Private Equity

Minimum EBITDA of $2M for a platform to pursue a roll up in the space. 7x EBITDA up from there. An example of a middle market private equity group would be Centre Partners:

Buyer Profile: Lower Middle Market Private Equity

Comes in at about $1M of EBITDA and wants to be in the 5x range. Sets your buyer floor. LMM PE funds typically look at deals in the $1M to $3M of EBITDA range. An example of a LMM PE group is Prospect Partners:

Buyer Profile: Individuals & Search Funds

Individuals and search funds like to be in the 3x to 4x range. Be sure to qualify these individuals ahead of time. You realistically only want financials and strategics talking to the seller for deals with approx $1M of EBITDA up. Deals south of $1M EBITDA, you start to get into the individual buyer range […]

Middle Market Breakdown

Because of the wide range of company sizes within the definition, the middle market can be further broken down into the following: Overview of Middle Market Pitchbook defines the middle market as companies with total enterprise value between $25 million and $1 billion and the “core middle market” as between $100 million and $500 million. […]

How to Build a Lower Middle Market/Middle Market M&A Practice Methodology?

In order to build a middle market M&A practice, one must fulfill the two parts of investment banking; coverage & origination and running the M&A process. Coverage & origination is usually reserved for the highest levels of the front office including the Managing Director of the coverage group. In building your own M&A practice, you […]

Strategic Management & The Investment Banker

Investment Bankers & Strategic Alternatives Investment  bankers  identify  the  business  opportunities  that  can  generate  the  most  attractive  equity  valuations  and implement strategic  plans  to  capitalize  on  those  prospects. Determine strategic alternatives with management after discussing market (m&a, financing, value chain of industry, where ROA is coming from, what the equity markets are rewarding with higher […]

How to Sell a Lower Middle Market/Middle Market Company?

On the sell side, the primary responsibility of the investment banker is to aid those owning perpetuities in analyzing their strategic alternatives related to inorganic growth or exit. Which phase is the perpetuity in? (SMB, LMM, MM, UMM, L) Which buyers are likely interested in the perpetuity? (Individual, Financial, Strategic, Special Situation) Each of these […]

How to Build a Career in Investment Banking Without Working 80+ Hours Per Week

There are many investment banking texts out there that claim that financial modeling and valuation is the core work of the investment banker. This is simply not the truth. The core work of the investment banker is origination, mandate/target matching, and deal structuring. It should follow that a text/course on investment banking should be based […]

Front Office Investment Banking vs. Back Office Investment Banking

Front office investment banking refers to the client-facing roles within an investment bank. These higher level roles are primarily concerned with winning new business and running buy & sell side processes. Back office investment banking is usually related to deal-support activities such as financial modeling & valuation as well as powerpoint editing.

What is Lower Middle Market & Middle Market Investment Banking?

Investment Banks & Capital Markets: Investment banks act as an intermediary between the build-side (uses of capital) and the buy-side (sources of capital). The investment bank will analyze, structure and market the financial product (perpetuity or annuity) to the appropriate sources of capital that match with the investment mandate. For financing product of IB, the […]


In order to build a career in investment banking, it is essential for the individual to know and practice the Front Office Investment Banking Process. Whether one’s career track is in a bulge bracket investment bank, middle market M&A group, or as a lower middle market M&A advisor, it is crucial to know the primary process of the investment banker.

I. Coverage

II. Mandate/Target Matching

III. Origination

IV. Fee Structuring & Winning Mandate

V. Underwriting

VI. Packaging

VII. Buyer List

VIII. Deal Structuring

IX. M&A Process

Hey there, my name is Michael Herlache MBA. I'm the founder of Investment Banking University.

Investment Banking University was founded in order to close the skill gap of the investment banking front office. All current investment banking training is focused on the quantitative skills of financial modeling & valuation, the responsibility of the analyst and associate. Previously, there has been no front office investment banking training which teaches the primary work of the IB front office including coverage, mandate/target matching, origination, deal structuring and the M&A process.

Investment Banking University makes it easy to learn the actual capabilities of the client facing investment banker. Currently, all investment banking training is dedicated to teaching deal support skills like financial modeling and valuation. This leaves students and professionals with a skill gap between themselves and what it actually takes to originate and do deals in investment banking. By eliminating the skill gap, Investment Banking University creates a place where students and professionals can secure their career in investment banking.

It’s unique because the university is entirely dedicated to front office skills like coverage, origination, and deal making rather than deal support skills like financial modeling and valuation. It’s special because students actually learn the capabilities that front office investment bankers use to make their money and start applying these concepts to advance their investment banking career.

The big benefit is that it helps students and professionals define a path to building a career in investment banking rather than simply pursuing the 80 hours a week analyst route. This helps them avoid interviewing for a job having never done the actual work.