Investment bankers help companies raise money by issuing and selling securities in the primary market. They lend their expertise to a company to help it determine the best strategy and the best place to raise either debt or equity capital. Investment bankers also prepare all the necessary documents to accurately present the value proposition for funding. Good investment banker firms prepare a Private Placement Memorandum which is a legal document designed to protect both sides from making a bad investment. They also ensure that all government regulations have been followed in the raising of any capital.
Typically, entrepreneurs that go it alone, raise capital in ways that violate SEC and NASD rules they didn’t even know existed. Hiring a good investment banker can be one of the smartest decisions an entrepreneur can make.