From time to time, we get very involved with our investments at the Board level. And one of the points we try to drive through a Board decision-making process is actually having a process that compares the present value of management’s operating plan with what the number is that can be achieved today via a sales process. What we have seen often in smaller companies is a lack of rigor in this evaluation. And then we see a lack of rigor in how to execute on said process, which involves the selection of an investment banker to run and ride herd on the process. Points that should be given very low consideration include: friend of a board member or CEO; a guy whose key attribute is he has been hanging around the hoop and buying lunch for years, or a name brand banking firm for whom this deal and process means absolutely nothing size-wise and is considered to be doing a golfing buddy a favor.

A banker friend threw this in our lap from his pitchbook. Good thoughts.

Criteria for banker selection:

• Transaction qualifications; i.e, has the firm/team done a significant number of transactions in our industry and has deep relationships in the industry?
• Does the transaction size match up with the experience of the firm?
• Is the team that is running the transaction (including the senior bankers) committed to getting it completed?
• Is the firm known for running robust processes, with well-defined timelines and ensuring that bidders adhere to very specific process milestones?
• Does the firm have experience with take – private transactions?
• Does the firm know how to position the company in the marketplace for maximum value?