How Investment Bankers are Different than Brokers
Why Dental Business Owners Choose Bankers Over Brokers
When it comes time to sell, many dental practice owners are unsure whether to work with a broker or a banker. The difference isn’t just semantics—it can significantly affect your outcome. At FOCUS Investment Banking, we offer the same sell-side process used for billion-dollar transactions to sellers of $10 to $200 million companies.
This sell-side process is used over and over again in the market because it is so effective. And the healthcare team at FOCUS has tailored it to the unique attributes of dental practices and the DSO buyer market. We outlined that process in detail in our last article.
Business brokers often focus on much smaller transactions and offer an abbreviated process. They usually work on many more transactions at the same time compared to investment bankers and thus offer a different level of service. Some of the core differences between bankers and brokers are as follows:
Brokers often focus on smaller practices, using broad listings and limited prep.
Bankers like FOCUS complete in-depth diligence on their clients, create detailed marketing materials, and market directly to a group of pre-vetted buyers. Brokers often create very limited marketing materials and use basic information supplied by the practice.
They may put up a listing online or send out a mass email, relying on buyers to reach out to them. Brokers then share whatever information they collected from the practice and may not be equipped to answer buyer questions and resolve issues that arise.
Investment bankers run structured, competitive processes that drive up valuations.
The FOCUS sell-side process uses two rounds of competitive bidding. Buyers work with our team on a timeline to gather needed information, answer questions, and structure a competitive offer (usually with our guidance). Our team invests in diligence up front so that we are equipped to answer questions, provide information, and keep the process moving at this critical stage. We are negotiating throughout, pushing buyers to offer the best terms possible and leveraging the competition among them.
Brokers often do not use a structured process, instead collecting offers from interested parties in a more reactive way.
Bankers also bring relationships with PE-backed groups and DSOs—often the most aggressive buyers in today’s market.
Bankers are often active across the broader market and do not limit their work to one practice area. For example, the FOCUS healthcare team covers the entire healthcare services landscape with a special emphasis on provider groups (including dental and physician practices). Because we are so active across the market, we have developed relationships with PE groups and other investors who are often active across healthcare verticals. This gives us special knowledge higher up the chain (e.g., knowing the private equity group behind a DSO vs. only business development personnel at the DSO), and the ability to negotiate more effectively for our clients.
The Total Package
At FOCUS, we pride ourselves on offering clients a total solution when selling their dental practice. We work as a quarterback, coordinating a sell-side process and bringing in other expert advisors as part of a team when necessary. We differentiate ourselves with quality work and senior level attention that is only possible with a low volume of engagements each year.
If you are interested in selling your practice, we look forward to sharing how our approach can help you achieve your goals.
Still exploring your options? We’re happy to walk you through how our process compares—and why dental business owners consistently choose FOCUS. Reach out today for a no-pressure conversation.
