How to Prepare to Sell or Finance your Company

Lunch and Learn

How to Prepare to Sell or Finance your Company

2

PresentersMike Chadwick• Investment Banker• Entrepreneur• Technology Expert• Former GoDaddy CTO• Managing Director, CKS Advisors LLC

Mary Juetten• Entrepreneur• Recovering Accountant• Senior Business Executive• ASU Law Grad• Founder & CEO of Traklight

Juliet Peters • Attorney & Outside In-house Counsel• In-house, Cold Stone Creamery• Former Journalist• Founding Partner Framework Legal



3

Today’s Agenda• Why?• What?• How?• Pitfalls• How to Prepare• Roadmap to Exit• Critical Takeaways

The Race Is On• 9.5 -12 Million businesses Estimated to trade

hands in the next 10-20 years• 70% of small businesses• $10 Trillion in value • 35% of small business owners rely on exit for

retirement


5

Thinking about an Exit or Financing?

• What is your desired goal?• How do you achieve the highest value?• Does a financing/partial exit make more sense?• Do you have the right advisors?• What will you do post exit? • Have you handled family concerns?• What is the ideal timing?• How do you properly prepare for your exit?


6

Why do I need to plan?It can take significant time to:• Determine the timing and type of exit.• Decide on the right type of successor.• Prepare for exit.

– Formal governance and processes– Modern operations and processes– Financial reporting and systems– Proper management team in place– Focus on increased valuation, based on how your business will be valued


7

Why do I need to plan?• Time to maximize value of the company.• Achieve greater control of the process and

related stress.• Minimize tax impact on exit• Promote the ongoing reputation of business for

remaining stakeholders – no surprises.


8

Where do I start?


9

What do I do?Most critical first task- Select the right team of advisors.


10

What do I do?


11

The Selling/Financing Process


12

Assessing Value

“The Market”

Strategic

Financial

Operational

Personal Stake of

Owners in Success/Failu

re

Business Strategy and

Structure

Sustainable Competitive Advantage

Risk Reward Profile for Investors

Capital Required in relation to

plans SUCCESSFUL TRANSACTION

Keys to Successful Transactions


14

Common Pitfalls - Foundation• Management Team• Outsourcing • Capital Structure• Culture • Strategy and Growth Plans• Processes and Financial Controls• Succession Planning


15

Common Pitfalls - Legal• Corporate Structure• Intellectual Property• Contracts • Books• Loan Documents• Employee Contracts and Agreements


16

Misconceptions• Valuation – Have to remove emotion from the equation.• Speed – It always takes longer than anticipated.• Depth of due diligence – If not properly prepared,

diligence is stressful and will reduce the end value of the transaction.

• There is one path – Every company is a bit different and it is a complex process. Rely heavily on advisors to ensure your path is solid.


17

Critical TakeawaysStart with the end in mind.Start properly – entity, contracts, financial

controls, IP, etc.Always be prepared for diligence.Be meticulous with administration and

governance.Hire the right advisors.Let go and have fun – remove emotions where

you can.


18

Questions?Mike Chadwick@[email protected]

Mary Juetten @maryjuetten @traklight [email protected]

Juliet Peters@[email protected]

mailto:[email protected]

mailto:[email protected]

How to Prepare to Sell or Finance your Company

Business

Transcript of How to Prepare to Sell or Finance your Company