We hear this all the time from some of the brightest Entrepreneurs in America. But the intellect it takes to found a business and grow it into a mid-market Technology Firm or Internet Company is far different than putting the puzzle pieces of an exit strategy together. That’s where ValleyBiggs and our network of advisors come into play.
First – Let us Help You Plan
The first question you must ask yourself is how you are going to exit your business. Some Entrepreneurs are interested in a total buyout whereas others are interested in staying on board after receiving a portion of a buyout upfront. Many equity groups prefer to have the founders stay on board for some period of time, but that period of time is usually a point of negotiation in the buyout structure. Here are a few items we go over with our founders when preparing an exit strategy for their company:
Succession
One of the most important aspects of exiting a business is preparing it to operate without you one day. Choosing and training a staff member or multiple members to handle the owner’s day-to-day is important to providing a buying entity with comfort that the business could potentially falter without the owner in place. There’s also a great deal of peace of mind that comes into play when a buying entity knows that the employees they receive in the transaction will be able to run the company on day one without a large learning curve. So, the exit strategy for any middle market company should start with a succession plan.
Post-Acquisition Rules
Most Entrepreneurs have an idea of what rules they want their M&A firm to following when selling their company. Some may want to remain in the same vertical, thus causing potential problems with competition. Others may want to structure the deal so that the seller is able to achieve the best possible tax treatment on the purchase price. Still others may want to keep a share of the business, post-sale. All of these rules should be brought out into the open and discussed during the planning stage. These rules will help ValleyBiggs vet the pool of buyers to ensure that only the right buyers are communicating with clients.
Business Prep
Another important aspect of preparing to exit is properly preparing the business so that when it is time to take the company to market, it is seen in the most advantageous light possible. There are times when our planning process will set our take-to-market timeframe months out, but by properly preparing the business for sale, Entrepreneurs have a great opportunity to significantly increase the purchase price of the business.
In summary, ValleyBiggs is ready to help Entrepreneurs walk down the road to exit. With so much experience in M&A as well as the Technology & Internet Sectors, the team of experts can make a big difference in how a company is viewed at market – it pays to seek out and use professionals, and very few can compare to ValleyBiggs.
