Sell Side vs Buy Side: What's the Difference?

What is the Sell Side?

The sell side in investment banking is focused on helping companies sell assets, whether that’s preparing for an acquisition, issuing new stock, or raising capital through an Initial Public Offering (IPO). The primary objective is to maximize the value of a company or asset and find the best possible buyer. If you're a corporate executive, you may also be interested in wealth management for corporate executives.

Key Roles on the Sell Side

Investment banks, financial advisors, and analysts typically make up the sell side. These professionals work closely with companies to present a business in the best possible light, which includes preparing financial reports, conducting valuations, and developing strategies for marketing the asset to potential buyers.

Sell Side Process Overview

The sell-side process starts with an in-depth business valuation to determine a fair and attractive asking price. Then, analysts and advisors prepare financial documents, presentations, and marketing materials to attract the attention of potential buyers. Once a buyer is identified, the team negotiates on behalf of the client to ensure they receive a competitive offer. The ultimate goal of the sell side is to secure the most advantageous deal for the seller.

What is the Buy Side?

On the buy side, the focus shifts to acquiring assets or companies. Buy-side professionals seek out investment opportunities, analyze potential deals, and execute purchases with the goal of building value for their clients or investors.

Key Roles on the Buy Side

The buy side is represented by roles such as portfolio managers, financial analysts, and private equity firms. These professionals conduct in-depth research to identify undervalued assets or companies with growth potential. They assess the financial health of these businesses, considering factors like cash flow, competitive landscape, and potential return on investment.

Buy Side Process Overview

The buy-side process involves identifying and vetting acquisition targets through detailed research and financial analysis. After identifying a potential investment, the team conducts thorough due diligence, reviewing everything from the target company’s financial statements to its operational efficiency. Once a purchase is finalized, the buy-side team often remains involved to ensure successful integration and maximize the long-term value of the acquisition.

Key Differences Between Sell Side and Buy Side

While both the sell side and buy side play vital roles in investment banking, their goals, strategies, and revenue models differ significantly:

• Goals and Objectives: The sell side aims to maximize the sale price of an asset or company, working to present it as a valuable investment opportunity. Conversely, the buy side’s goal is to acquire assets at favorable prices, ideally under market value, to achieve a strong return on investment.
  
  
• Approach and Strategy: Sell-side teams focus on marketing, negotiation, and attracting the highest bid, while buy-side professionals emphasize selection, value assessment, and strategic fit with existing portfolios.
  
  
• Revenue Models: Sell-side earnings are often success-based, meaning they earn fees or commissions upon successfully closing a transaction. Buy-side earnings, on the other hand, stem from management fees or profits generated by the acquired assets or companies.

How Revera Capital Supports Sell Side and Buy Side Transactions

At Revera Capital, we understand the intricacies of both sides of a business acquisition. Whether you’re looking to sell your company or acquire a new one, our team offers dedicated support tailored to your needs. For sell-side clients, we provide thorough valuations, develop effective marketing strategies, and negotiate deals to help you achieve your financial goals. On the buy side, we conduct due diligence, assess investment opportunities, and help you build long-term value through strategic acquisitions.

Partner with Revera Capital for Successful Business Transactions

Choose Revera Capital for your next acquisition or sale. Whether you're on the sell side or buy side, our team is here to guide you every step of the way. Contact us today to learn how our expertise in business acquisitions can help you maximize value and achieve your objectives.