Is it better to sell a startup with an investment banker or directly via the founders (value below $20M)?
It is always better to use an investment banker. I’ve done it all different ways (with a banker, without, and sort of with).
You are going to always lose without a banker — because you need a 3d party to help you get the best >realistic< deal out of a complex set of outcomes. Best case, you will be directly negotiating sensitive issues with your new boss. This will almost always impact the relationship around tough issues.
Beyond that, you will almost always leave some money on the table — even if you’ve already agreed on price. I made more money as a % of the deal when I had a banker, with less drama after the deal. They get you better deals on retention, escrows, hold backs, stay bonuses, etc. Sometimes, it’s hard to ask for all of this on your own. But a banker can.
Having said all that, it’s hard to find a good banker for small deals like this ($20M or less), especially in tech and the Bay Area. In the SF Area, many folks either won’t tough deals that are too small or have terms you’d struggle with.
So my net advice is always use a banker for a deal >=$50m, and at least try to for smaller deals, too.