Why would a company use an Investment banker?

Expert Answers
farouk23 eNotes educator| Certified Educator

An investment banker is " an individual who works in a financial institution or investment arm of a corporation who is responsible for raising capital" or involved with the associated research and compliance necessary for raising capital.

A company may use an investment banker for a number of reasons:

  • They may need to raise capital an require his/her specialized knowledge and financial networks in order to raise the funds.
  • They may require merger and acquisitions advice and the necessary corporate compliance knowledge that are required.
  • They may require advice on corporate reorganization.
  • A company may want to go public and need advice on an IPO ( Initial Public Offering) and require the specialized knowledge of an investment banker in order to navigate the process. 
  • They may require an investment banker to conduct risk management, security analysis or alternative investment research. 

there are a whole host of other reasons for a company to use an investment banker and they are highly valued for the knowledge and independent professional opinion on corporate financial matters.