How to Vet an Investment Bank: Best Practices for Checking References

Hiring an investment banker can be a game-changer for an M&A or capital raise. The right bank helps maximize value by targeting better buyers and positioning the business for high multiples, all while helping to minimize disruption by managing 50+ buying or investing candidates—allowing founders to focus on growing their business instead of running a transaction.

Choosing the right investment bank isn’t always straightforward—founders must assess industry focus, expertise, transaction type, deal size, and even cultural fit. One of the best ways to differentiate banks is by speaking with past clients, but too often, founders rely on the bank’s handpicked references, which may not provide the full picture. To assist with this process, here are key tips for requesting and evaluating references effectively.

Quick Qualifiers Before Getting References

Before diving in and requesting references from every potential candidate (because who has time for that?), start with these key qualifying do’s and don’ts to narrow your options:

• Industry & deal expertise – Make sure the bank has direct experience in your sector (e.g., software, internet) and your preferred transaction type (M&A, private equity).
• Deal size alignment – Check if the bank’s average deal size matches your transaction—this ensures they are comfortable handling deals of your scale.
• Who’s actually running your deal? – Don’t just look at the firm’s reputation—verify which individual bankers will be leading your transaction and research their track record.
• Avoid conflicts of interest – Steer clear of banks that work both buy-side and sell-side, as this can lead to misaligned incentives.

Best Practices For References

Once you’ve verified key details and narrowed your options, a good way to help determine whether an investment bank is the right fit is by asking for references. While most banks will have a handful of polished references ready to share, it’s up to you to request them proactively—banks won’t always volunteer this information. Here’s how to get valuable insights from reference calls.

1. Ask for 10+ References—Not Just a Handpicked Few

One way to get an honest view of an investment bank’s track record is to ask for a large reference pool—10, 15, or even 20 past clients—prefereably with similarities to your situation such as sector, transaction type, or transaction size.

You won’t need to call every reference, but requesting a broader list helps in three key ways:

• It tests the bank’s depth of experience. A strong bank should be able to provide a long list of satisfied clients quickly. If a bank struggles to produce enough references, that could be a red flag about their experience level.
• It validates consistency. If they can provide multiple references within your exact vertical and deal type, it’s likely a sign that their success is repeatable, not just a one-off.
• It could expose gaps in their track record. If a bank hesitates to share an extensive reference list, it may indicate limited experience, inconsistent outcomes, or a lack of long-term success in your space.

Essentially, asking for references is like asking for a menu—if a bank pushes back on providing options, it likely means they haven't been in business very long, their experience is narrow, or they haven’t been successful enough to repeat the process consistently.

2. Select & Verify 2-3 References from the List

From that list, select 2-3 at random or according to the criteria below. All banks have a shortlist of cherry-picked references—clients they know will give glowing reviews, so this method should give you a more authentic perspective.

How to pick the right references to call:

• Prioritize those with a similar company profile and transaction type to yours.
• Look up the reference companies beforehand to ensure they match your stage and goals.
• Ask the bank to facilitate introductions—but you control which references you contact.

This approach may increase your chances of receiving genuine insights rather than a rehearsed sales pitch.

3. Ask for References on Specific Bankers—Not Just the Firm

A great bank is only as good as the bankers running your deal. Many firms promise "senior-level attention," but in reality, senior bankers lead the pitch while junior team members handle most of the transaction.

To help ensure you’re working with the right people, ask for references tied to the specific bankers handling your deal—not just the firm. You can even request past transactions those bankers worked on to evaluate their individual contributions.

When speaking with references, consider asking:

• How responsive were the bankers before vs. after the engagement letter was signed?
• What role did each team member play in the transaction?
• Were there any challenges or conflicts during the process?

By focusing on individual banker performance, you’ll gain a clearer picture of the expertise and attention you’ll actually receive.

Final Thought: Don’t Skip This Step

Checking references may seem like a small step, but it can make a huge difference in selecting the right investment bank. By demanding a broad list, selecting your own references, and evaluating individual bankers, you can put yourself in a better position with a better team to help you achieve a successful outcome.