We make partnering easy

Step 1

Determine Mutual Fit

In this step we define success as learning about your business, understanding your personal and professional objectives and educating you on who we are.

We most often start our process with an introductory phone call. On this call we learn about your business and goals. We also answer your questions about our experience, motivations and approach. Even if one party decides there is not a mutual partnership fit, we want you to depart our conversation with a better understanding of the sale process, valuation considerations and possible options for you and your business.

A promising introductory phone call leads to reviewing information on your business. We typically enter into a Confidentiality Agreement in order to review: (i) last three years of financial statements and current year-to-date performance, (ii) an initial estimate of expense “adjustments” (see our Valuation Calculator for examples of common expense adjustments), (iii) revenue by customer for your top 10 customers (ie, Customer A, Customer B, etc.) and (iv) any other information you think would be helpful to understanding your business.

After reviewing this information, we quickly confirm our interest or politely decline moving forward. Part of confirming our interest includes providing a valuation estimate for your business. If our valuation estimate is within your expectations, we schedule an in-person meeting at or near your office to further our discussion.

Step 2

Agree on Key Terms

In this step we define success as establishing straightforward terms for a transaction and defining our respective roles and responsibilities going forward.

After a successful in-person visit, the process builds toward providing you with a formal offer for your business. We often request additional information to round out our understanding of your business and industry. After reviewing this additional information, we provide you with a formal three to five page document detailing the specific price, terms and structure of our offer. This offer is called a Letter of Intent and represents a serious intent, by both parties, to carry out the proposed transaction at the agreed-upon terms. Before signing the Letter of Intent, we carefully walk you through our proposal to make sure you understand both the “what” and the “why” behind each aspect of our offer. Getting the Letter of Intent right at the onset is key to a smooth process.

In addition to price, terms and structure, the Letter of Intent provides a roadmap for the work required to move from this stage of the process through to closing. We identify the necessary work as well as our respective roles and responsibilities in getting it accomplished. There are often sensitive diligence priorities, such as contacting customers or interviewing key managers, that require reaching consensus on when and how to accomplish without disrupting the business and your key relationships. We have navigated these issues as both buyer and seller and recognize the importance of getting this part of the process right.

Step 3

Complete Transaction

In this step we define success as completing the diligence, financing and legal process required to launch a new partnership.

The process required to move from signed Letter of Intent to launched partnership takes 75 to 90 days. The process represents a significant amount of work and requires commitment by both parties for it to be successful. We have navigated this process numerous times and understand how to work diligently and purposefully to achieve success. While some of the individual tasks can be executed concurrently, it may be helpful to think of the overall process as three distinct stages.

The first 30 days of the process focuses on due diligence. By this time in our discussion we have learned quite a bit about you and your business. The vast majority of our diligence work involves confirming what we have learned with help from our professional advisors. Major topics include (i) retaining an accounting firm to complete accounting, tax and information technology systems diligence, (ii) retaining an insurance diligence provider to review the Company’s current insurance coverage and risk exposure, (iii) completing customer calls and/or a customer satisfaction survey, (iv) conducting interviews with key Company employees and (v) undertaking a review of various legal, contractual and other business matters of the Company.

The second 30 days focuses on arranging financing for the transaction. We invest a significant portion of our personal net worth in each partnership and may complement our investment with additional equity capital from like-minded investors we have worked with in the past. While we capitalize our partnerships with significant portion of equity, we most often supplement equity with a prudent amount of debt financing. Our conservative approach to capitalizing our partnerships means we have numerous lending institutions from which to choose from.

The final 30 days focuses on completing the legal documentation. A thoughtfully crafted Letter of Intent helps focus documentation by providing a framework from which to draft the key terms and conditions of the partnership. In addition to the main purchase-sale agreement there are a variety of ancillary documents required to complete the transaction, such as employment agreements, non-competition agreements, lease agreements, bills of sale and various other documents. We don’t try to “win” the documentation process but rather focus on the broader objective of getting a new partnership off the ground.