Storm Duncan of Ignatious on when to hire an investment banker and when not to

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The decision to hire an investment banker rarely arrives as a single moment of clarity. More often, it emerges gradually, shaped by inbound interest, board pressure, or a vague sense that the company could be preparing for something, even if no transaction is imminent. Many founders engage advisors too early, others far too late, and most without a clear definition of what success actually means.

Storm Duncan, veteran technology M&A banker and Founder and Managing Partner of Ignatious, argues that the problem is not timing alone, but intent. Founders conflate engagement with commitment, and in doing so either outsource judgment prematurely or delay help until leverage has already eroded.

He describes the dilemma as a kind of Goldilocks problem. Hiring a banker too early diverts attention from building the business. Hiring one too late forces decisions under pressure. The optimal path sits in between.

Duncan is clear, he believes that companies should not formally hire bankers before they are ready to sell or before an offer is on the table. At that stage, management energy is better spent improving fundamentals. Yet he also cautions against isolation. Even the strongest company in the forest will be overlooked if no one knows it exists.

Duncan believes this can be accounted for by selective engagement without formal mandate. Developing relationships with trusted advisors allows a company to educate bankers about its business while retaining control over timing and disclosure. These conversations help build market awareness and ensure that when a process begins, the advisor already understands the company, the buyer landscape, and the relevant dynamics. Trust is essential here. Information shared prematurely or indiscriminately can damage future outcomes.

The moment to formally hire a banker, Duncan says, is clear. It is when a company decides it wants to sell or when it receives an offer. Even if the answer is no, skilled advice matters. Managing a buyer relationship without burning goodwill requires judgment and discipline. Poorly handled refusals often foreclose future opportunities.

Choosing the right banker is where most founders struggle. Duncan identifies three non-negotiable criteria.

First is knowledge and access. It is important for the advisor to understand the company’s sector, its competitive position, and the buyers who matter. Generic competence is insufficient in markets where nuance determines leverage.

Second is trust. Duncan is blunt about incentives. Many bankers spend the year thinking about their bonus and view clients primarily as fee events. The advisor worth hiring is the one willing to recommend against a deal when it is not in the client’s interest, even at the expense of personal compensation. Duncan points to his own experience advising Google, where repeatedly saying no built credibility that ultimately mattered more than any single transaction.

Third is experience. Judgment is accumulated, not credentialed. Advisors who have only operated in one market environment lack the pattern recognition required to navigate complexity. Exposure to failed financings, broken diligence processes, and cyclical shifts matters more than brand affiliation.

Duncan also cautions against overreliance on reputation. Large banks carry prestigious names for good reasons, but those reputations reflect specific use cases. Many do not want to work on sub-billion-dollar deals, regardless of what pitch decks imply. In such cases, senior bankers sell the mandate while junior teams execute it. Fit matters more than logo.

Central to Duncan’s philosophy is the idea that it is beneficial for founders to define success before hiring anyone. For some, success is maximizing price. For others, it is certainty, speed, or minimizing disruption to a fast-growing business. A deal that closes quickly at a slightly lower valuation may be rational if management believes risk increases with time. Advisors could be evaluated against the founder’s definition of success, not a default metric.

Incentives could reflect this definition. Compensation structures that reward outcomes aligned with the company’s priorities encourage the right behavior. Unrealistic thresholds and vague objectives do not.

Duncan’s guidance ultimately reframes the banker decision as a question of alignment rather than timing alone. The right advisor does not replace judgment. They extend it. They help companies act deliberately when emotion and distraction are most likely to take over.

Hiring a banker is not a milestone. It is a tool. Used correctly, it can preserve value. Used indiscriminately, it can accelerate its loss.

This article is for general informational purposes only and does not constitute investment, financial, legal, tax, accounting, or mergers and acquisitions advice.