Frequently Asked Questions about Investment Banking

CEO at Laidlaw & Company (UK) Ltd. in New York City, Matt Eitner has been working in the finance industry for over two decades and has held managerial positions at several financial institutions. Matt Eitner is an experienced equities trader and held a VP position at Casimir Capital, a boutique investment bank.

Investment banks aren’t like typical savings and loan institutions geared to the public. Rather, they work with large entities as securities agents, assist with mergers, and provide other support services. Here are some common questions that people tend to have about investment banks.

Q: How do investment banks raise capital?
A: The principal mechanisms are debt and equity offerings such as IPOs, selling shares, issuing bonds, and working with credit facilities.

Q: What is a boutique investment bank?
A: Just about any investment bank that doesn’t belong in the bulge bracket (the world's largest international investment banks) can be considered boutique. This includes those that specialize in specific industries or products or in working with small to mid-sized clients.

Q: What’s the best investment bank?
A: The answer really depends on the criteria used to grade the banks. There are numerous listings that evaluate investment banks by volume, prestige, number of deals, etc.

Key Responsibilities of an Investment Bank in Mergers and Acquisitions

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With a career spanning nearly two decades, Matt Eitner has served in various leadership roles with leading investment firms in New Jersey and New York. Matt Eitner was named the CEO only six months after joining Laidlaw & Company, an investment banking and brokerage firm serving high-net-worth and institutional clients.

Investment banks specialize in complex financial transactions, including facilitating mergers and acquisitions (M&A). Listed below are some of the responsibilities of an investment bank in an M&A.

1. Valuation. Investment banks evaluate the value of a possible acquisition and help both parties agree on a fair price. They create financial models to capture the fixed and variable financial components that factor into the valuation.

2. Sell-side or buy-side work. An investment bank can represent either a potential acquirer, a potential seller, or both in the case of a merger. An investment bank performs what is known as a buy-side work, wherein they study the market to find a desirable company that best suits the strategic goals of the firm that it represents. On the other hand, a company may approach an investment bank to conduct a sell-side work and look for a buyer who is willing to purchase an entire company or part of it.

3. Financing. Should a potential buyer require funds to acquire a company, investment banks can act as an intermediary in selling securities or raising debt financing. Through valuation, investment banks can determine the best price of new shares and find investors who will buy the newly issued bonds or equities.