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Back to blog October 02, 2017 No Comments Author: Andy Jones

Interview – Dante Fichera with Independent Investment Bankers

We recently interviewed Dante Fichera, the owner and operator of Independent Investment Bankers Corp. (IIB), a registered broker-dealer and FINRA/SIPC member that supports investment banking professionals engaged in mergers & acquisitions and capital raising activities. As a broker dealer, Dante shared his firm’s strategy to help investment bankers succeed and his thoughts on the overall outlook for M&A.

Role of the Broker Dealer

After the Stock Market Crash of 1929, and the ensuing Great Depression, congress determined to create laws that would protect the investing public. The primary goal was to provide information to the public about the securities offered, and the broker-dealers who offered them. The Securities Exchange Act of 1934 required securities broker dealers to register with the federal government. Over time, regulation of securities broker dealers has become much more than just transparency and providing information. It has created a complex body of law that requires brokers to determine whether their recommendations are suitable for their clients, by requiring them to “know their clients” and the products they are recommending. Broker-dealers are regulated by the Securities Exchange Commission and the Financial Industry Regulatory Authority to try to make sure the brokers are acting in their clients’ best interest.

I’ve been in the industry for quarter century and the IIB compliance officer / legal counsel has over 30 years of industry experience and between us both, we’ve seen a lot of cycles. Post financial meltdown, the regulatory landscape changed significantly on the cusp of what happened with Madoff and other fraudulent events. As a result, licensing like the Series 79 was created to provide more oversight. What many people don’t understand is that increased regulation actually improves the securities markets. Regulation provides investors’ confidence in our markets and increases capital investments domestically and from overseas in U.S. investment opportunities.

IIB Background

We help independent offices close their transactions in accordance with securities laws and rules. IIB is a broker-dealer set up with the intent of providing a low cost, high PL solution for independent investment bankers who want to have a broker dealer license and build their own brand in the marketplace. Beyond the independence and the economics, we feel that we are business partners with our bankers. Their success is our success. Unlike what a banker would earn in a boutique setting, the IIB platform allows bankers to build on their own brand and hopefully make more money.

IIB strives to provide the bankers on our platform with increased deal flow and access to deals to help ensure their success.

Increasing Deal Flow

With our growing network of 50+ bankers, IIB hosts an annual conference to promote collaboration among bankers, recognizing that each has different skill sets. Our bankers and some private equity groups are invited with the goal of building relationships and identifying individual strengths. If a banker comes across an opportunity that doesn’t fit in their wheelhouse, they might connect with a group or banker that does have the relevant sector expertise. Working with other IIB bankers, the client is better served and the banker can get 20% of the pie instead of 0%. This approach has paid off for our members. We’ve seen a lot of collaboration occur over the years as a result of the annual conferences.

We also compile a quarterly deal sheet. At any given time, we may have over 100 mandates. In a confidential way, we share the quarterly deal sheet with the private equity firms in our network and internally with all IIB bankers. Protecting the identity of their clients, the bankers write their own description with revenue and EBITDA information. The private equity groups will request to connect with the relevant bankers on deals that fit their investment parameters. After approval from the banker, I’ll make the introduction and let them move forward on their own.

Access to research information is also an important component to identify new clients and buyers or potential investors for deals. is an instrumental service provided to all IIB bankers. Over 75% of our bankers actively use the service for building their marketing list. We complement that through an internship program providing outsourced analyst support services.

FINRA & SEC Compliant Deal Process

  • We have a non-invasive process that snaps right into a best practices approach for executing a deal. All the big firms follow the same approach.
  • Run background checks on company sellers to make sure they are not on a financial crime list for things like securities fraud.
  • Utilize a deal room and ensure all deal information is secured in cloud-based folders that meet SEC certification for archiving and storing electronic information.
  • Perform a completion test to ensure all information is compiled according to the buyers’ and investors’ checklist requests.
  • Review marketing documents to ensure inclusion of the appropriate disclosures and that there are no unsubstantiated promises or guarantees. (IIB does not have a set marketing document, everyone has their own format. We’ve seen bankers execute large transactions using all different mediums of marketing. I don’t think there’s one right solution, in terms of format).
  • Prior to close, with sophisticated tools, we thoroughly review the investor/buyer in the deal to make sure they are not associated with criminal organizations.
  • The source of the funds is carefully reviewed in order to compliance with the Patriot Act.
  • Working with the banker, a transaction summary report is assembled to ensure the transaction has been properly documented and will be easy to review should regulatory examiners wish to inquire.
  • When the funds come in, we pay the banker on the same day.

Cybersecurity Threats

Managing cybersecurity threats is another way IIB adds value. The largest theft of property is the hacking of proprietary business process information that our business has and our investment bankers have access to. IIB goes beyond what a lot of other firms will do on this front. In addition to using SEC compliant technology like Egnyte to collaborate internally, we procure an FINRA/SEC IT consulting firm to ensure that we are protecting ourselves the best we can. They upload software agents to all our bankers’ computers where client data is stored. Hard drives are encrypted, patches are continually updated and anti-malware and anti-virus software is installed. Layered on top of that is a surveillance agent that allows management to have effective reporting and also identify any threats, attacks or weaknesses. If there is an attack on a machine, we can see that and notify our investment bankers. We also include email archiving and surveillance for each firm’s individual domain.

Affiliate Fees

We are very competitive in terms of fees, maybe the most competitive in the market. We provide a 90 – 95% payout on commissions earned by the banker on a transaction. That’s an aggressive payout schedule. The onboarding and affiliation costs are passed through (primarily technology-related), but those are negligible fees. IIB makes money on the retention portion of the retainer and commission. That’s why our firm is very focused on finding deal makers, individuals that do this for a living and have the background, experience and expertise to help a client execute a transaction.

It’s free to be affiliated if you close at least one deal per year. After the initial onboarding fees, we charge $150 per month, but if you close a deal, we will give the monthly fees back to you. For example, if at month 10, you’ve paid IIB $1,500 to be affiliated, when you close a deal, I’ll give you the $1,500 back along with the commission that you’ve earned and not charge you any monthly fees for the remainder of the year.

M&A Outlook

Over the next 20 years, deal activity should be high as baby boomers look to sell their lower middle market companies and transition into retirement. The big liquidity event that people are expecting is somewhat delayed by the fact that people are now living longer and, thus working longer. A lot of these $10 – $15 million revenue business owners personally make half a million to a million in income per year. If they retire a bit early and sell their business, how are they going to replace that half a million per year income? Putting $10 million (minus all the taxes) in the bank, will not provide them with returns that match what the business pays them. So, they are waiting to sell. Sure, they would love to retire and go ride horses or whatever, but they can’t. They need the income. I’m an optimist; eventually these people will be ready to retire and if the multiples are still favorable, they will sell.

About Independent Investment Bankers Corp.

Independent Investment Bankers Corp. (IIB) is a broker-dealer exclusively dedicated to serving investment banking professionals engaged in M&A and capital formation activities for companies with revenues of $10 million to $450 million. IIB associates with investment banking professionals who are grounded on integrity and who work exclusively with institutional clients. IIB offers its investment bankers licensing and registration, powerful economics, independence, research capabilities and access to deal flow.