PART I
Strategic Vendors and Specialty Resources
• There are more than 100,000 investment bankers in the US? Do you trust that you have the best investment banker for your transaction?
• Is your investment bank correctly incentivized to ensure the best outcome for you, your family, your employees, and your shareholders?
• How much diligence have you done on the buyer to be sure that they have the cash and wherewithal to consummate your transaction?
• Do you have an experienced M&A lawyer, who understands your unique situation?
• Have your lawyers made your earn-out as painless as possible for you and your key partners, since working for a company, and having a “day job,” is often very difficult for freedom-loving former business owners.
• Do you have a transaction-focused accountant who understands, and is up to date on, tax strategies for transactions like yours?
• Do you have the best virtual data room software; and have you and your team stocked it correctly so that buyers gain more confidence in your company? (see data room documents below).
PART II
Seller Exit Readiness Questions
• Have you discussed locking in your legal fees to save time and money?
• Are you doing an asset sale or an entity sale?
• Who are the three “Trusted Resources” on your team that will help you do all the heavy lifting on the transaction; and who will keep everything strictly confidential for the 6 to 8-month closing cycle?
• Do you fully understand the difference between selling your business to a strategic buyer, who may pay far more, versus selling your business to a financial buyer, who will pay a pre-established EBITDA multiple for your business, using an industry playbook?
• Do your investment bankers and advisors have a “know-it-all” mentality when it comes to exit valuations? This means that since they already know that your business could sell for 5 times the revenue (as an example), they may be far less likely to brainstorm for out-of-the-box ideas to attempt to enhance your exit price.
• Are you confident that you and your team have provided all necessary information to the buyer; so that they can’t use any implied information shortfall to attempt to renegotiate the terms of the deal at the last minute, while you have deal fatigue?
• Are your key vendors and clients on board with the transaction and will they keep things confidential?
• How are you incentivizing your team both pre-sale and post-sale?
• Are your contracts locked down and finalized for all key employees?
• Have you considered taking some or all payments in the form of stock ownership in the buyer, instead of all cash, to give you more upside potential long-term?
• Have you discussed locking in your legal fees to save time and money?
• Are you doing an asset sale or an entity sale?
• Who are the three “Trusted Resources” on your team that will help you do all the heavy lifting on the transaction; and who will keep everything strictly confidential for the 6 to 8-month closing cycle?
• Do you fully understand the difference between selling your business to a strategic buyer, who may pay far more, versus selling your business to a financial buyer, who will pay a pre-established EBITDA multiple for your business, using an industry playbook?
• Do your investment bankers and advisors have a “know-it-all” mentality when it comes to exit valuations? This means that since they already know that your business could sell for 5 times the revenue (as an example), they may be far less likely to brainstorm for out-of-the-box ideas to attempt to enhance your exit price.
• Are you confident that you and your team have provided all necessary information to the buyer; so that they can’t use any implied information shortfall to attempt to renegotiate the terms of the deal at the last minute, while you have deal fatigue?
• Are your key vendors and clients on board with the transaction and will they keep things confidential?
• How are you incentivizing your team both pre-sale and post-sale?
• Are your contracts locked down and finalized for all key employees?
• Have you considered taking some or all payments in the form of stock ownership in the buyer, instead of all cash, to give you more upside potential long-term?
PART III
Exit Concierge Enhanced Planning
• Have you considered remedies in the event the deal takes longer than expected?
• How will you keep yourself and your team focused on growing the company and keeping the company objectives/rhythms alive, while the deal is consuming vast resources, like time, attention, and money?
• Do you have audited financials to give more confidence to the Investment bank and the buyer community and potentially increase the sale price of your business?
• Have you gotten a Quality of Earnings report completed with a top-10 national accounting firm?
• Do you have a trusted, experienced deal advocate between you, your bankers, your lawyers, your accountants, and the buyers, so you have a dedicated accountability partner, a shoulder to cry on – and a person to speak to who has “been there and done that” – at critical times during the transaction cycle?
• Have you done a thorough auction to ensure that you have the best bankers, the best buyers, and the best terms?
• Have you structured the deal so that you get an optimized amount of cash or stock up-front, along with a back-end payout that you are confident you’ll receive?
• How are you handling confidentiality with your team? With your clients? With your industry? With your family?
• When the deal gets hairy, and it WILL get hairy, who are you going to call for advice at midnight on a Saturday night?
• How are you planning to manage your money after the sale?
• Do you have the proper estate plan in place?
• Do you have a clear and executable employee/business transition and integration plan for post-exit?
The Exit Concierge ensures that all these questions are answered and managed appropriately.
We are accountable to our clients for two objectives:
- We help you to develop a comprehensive Exit Plan customized to meet your individual needs.
- We successfully execute the plan.
Book An Exit Discovery Call
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info@MutualCapitalAlliance.com