For your liquidity event, do you know the value of your M&A advisory team?
Your liquidity event represents the largest financial transaction of your life. You have one chance to get it right, and you better make it count.
Most buyers, to their detriment, believe the skills that built the business are the same ones to sell it. So buyers are counting on you to make mistakes.
Every mistake lowers your enterprise value. Make enough mistakes, and you can blow the deal.
Who am I, and how do I know?
I started my eLearning business after graduating from my MBA program. I had no money, experience, or team. The truth is I had no business being in business.
My saving grace was my grit and determination, which had me welcome success.
With success, I received a 7-figure offer from a bright and experienced buyer.
I said “no” to the 7-figure offer and “yes” to mastering the art and science of a liquidity event. Then, two years later, I said “yes” to a 9-figure offer from a different buyer.
Today, I pay it forward. I help business owners through the 90-day Deep Wealth Experience. At the heart of the Deep Wealth Experience is the exact 9-step roadmap that I created for my 9-figure exit.
How did I go from saying “no” to a 7-figure offer and “yes” to a 9-figure deal?
The 9-step roadmap of preparation was my saving grace. Preparation is the key that unlocks deal certainty and enterprise value.
Step six of the 9-step roadmap helps you master the art and science of building an advisory team. The value of your M&A advisory team comes from five key areas.
Do you know how to maximize the value of your M&A advisor team?
The seeds of creating value welcomes your future wealth — Jeffrey Feldberg
The value of your M&A advisory team starts with findings buyers to run an auction.
Most business owners believe that it’s their responsibility to find their future buyers. But, unfortunately, in this instance, these business owners are wrong.
As a business owner, it’s not your “job” to find prospective buyers for your business.
Part of your M&A advisory team is investment bankers. So look to your investment bankers to be the ones to both find the buyers and run an auction.
There are two types of investment bankers:
Transactional and advocate investment bankers find you the buyers and run an auction. But this is where the similarities end.
A transactional investment banker specializes in your industry and knows all the buyers. An advocate investment banker neither knows your industry nor the buyers.
Do you know which investment banker is the best for you?
Transactional investment bankers will not jeopardize their book of business for your deal. Transactional investment bankers will always choose the buyer over you.
An investment banker who is an advocate hasn’t worked with your future buyer. There is no book of business with your prospective buyer. As a result, the advocate can “burn bridges” to get you not any deal, but instead, the best deal.
Leverage the value of your M&A advisory team with an advocate finding buyers and running an auction.
Do you know what your M&A advisory team can do that you can’t?
Don’t confuse visibility with credibility — Harvey Mackay
Know that the value of your M&A advisory team comes from establishing your credibility.
In the world of mergers and acquisitions, the currency is not money but instead is trust,
Without trust, there is no deal for your liquidity event.
Trust with your future buyer increases both deal certainty and enterprise value.
Why do your investment banker, M&A lawyer, and other advisors establish credibility?
You show buyers that you’re serious about your liquidity event. As a result, you’ve spent time and money to create your M&A advisory team.
You are an unknown to buyers. Buyers don’t like risk, and as a result, view the unknown as risk.
The right M&A advisory team becomes an extension of you and your business. The reputation of your M&A advisors becomes your reputation.
Even if buyers don’t know your M&A advisors, the track record of your M&A advisors speaks for itself.
The right M&A advisors with an excellent track record put buyers on notice in a few areas.
First, you signal to buyers that while you don’t know what you don’t know, your advisors do. Second, you show your buyers that you are trustworthy because of the time and money spent on advisors.
The value of your M&A advisory team is helping you establish trust with buyers early in the process. You also gain access to buyers who would otherwise be off-limits.
Your takeaway is to assemble a world class advisory team.
Ready to find out the next area where you receive value from your M&A advisory team?
To improve is to change; to be perfect is to change often — Winston Churchill
Leverage the value of your M&A advisory team by having them manage the liquidity event process.
Why should your M&A advisory team lead the liquidity event process?
You can’t master something you haven’t done before.
Don’t believe for a moment that the skills that built your business are the same ones to sell it. The skills are different.
There’s a reason why 90% of liquidity events fail. Most business owners make catastrophic mistakes.
Remember, you’re dealing with buyers who are masters of a liquidity event. You’re going up against professionals who have the experience, team, and expertise.
Without preparation and a world-class M&A advisory team, the odds are not in your favor.
When it comes to your liquidity event, now is not the time to learn by trial-and-error. You have too much to lose.
What can you do?
The 9-step roadmap of preparation has you leverage the power of your M&A Advisory team.
Your M&A lawyer helps with an internal due diligence audit before your liquidity event.
Look to your investment banker to create the infamous confidential information memorandum. Of course, it’s also your investment banker who finds the buyers and runs the auction.
The value of your M&A advisory team is guiding you through the process from start to finish.
Do you know the one other tremendous value of your M&A advisory team?
You must remain focused on your journey to greatness — Les Brown
The value of your M&A advisory team is allowing you to focus on the business.
Most business owners overlook one crucial detail when they start a liquidity event. The business needs to perform.
Some of the projections provided to the buyer take place during the liquidity event. Your buyer is scrutinizing your forecasts compared to the results.
If you miss your projections, you can either lose the deal or lower your enterprise value. Neither scenario is desirable.
The value of your M&A advisory team happens in many ways. For starters, your M&A advisory team insulates you for the buyer.
Your advocate investment banker should pressure the buyer on deal points. In this good cop/bad cop scenario, you stay on the sidelines.
Remember, you’ll have interactions with the buyer after the liquidity event. Your investment banker won’t. So you save yourself hard feelings from the buyer towards you.
Speaking of the buyer, less is always more. When dealing with buyers, you should provide only the information asked. No more. No less.
Once again, the value of your M&A advisory team is interacting with the buyer as the first line of defense.
There’s a strategic advantage when you interact with the buyer as needed. As a result, you and your key employees save time and continue to focus on the business.
Do you know how to unlock the value of your M&A advisor team during the last phase of your liquidity event?
Information is a negotiator’s greatest weapon — Victor Kiam
An enormous value of your M&A advisory team is their ability to negotiate the deal for your liquidity event.
There is both an art and science to negotiations. Step three of the 9-step roadmap focuses on your Future Buyer. One of the strategies is to do two critical things.
First, you create a list of deal points that must be in the deal. Examples include the type of sale and your involvement after closing.
Second, you create a list of deal points that are a no-fly zone. Examples include no earnout and an enterprise value below your threshold.
Deal points and no-fly zones give you and your advisory team clarity. The power of preparation is having you know well in advance what you want and don’t want.
A fatal mistake to avoid is attempting to negotiate with the buyer. Words to the wise, don’t do it.
The value of your M&A advisory team is to act as the filter between you and the buyer. In step six of the 9-step roadmap, Advisory Team, you master the art of finding and hiring the best advisors.
Let both your M&A lawyer and investment banker handle the negotiations. Unlike yourself, the negotiations are not personal for your advisory team.
Your advisory team has clarity on what it takes to get the deal done through your deal points and no-fly zones. The power of the auction with other buyers circling in the background gives you choices.
The value of your M&A advisory team is getting you the best deal and not any deal.
To prosper and enjoy the value of your M&A advisory team, there are five critical things you must do.
It’s your advisory team that is the gateway between success or not for your liquidity event. But, unfortunately, most business owners make the fatal mistake of “showing up.”
Knowledge is power, but only if you know where to look and what to do.
You now have five powerful strategies that help you enjoy the value of your M&A advisory team.
It’s no coincidence that I said “no” to a 7-figure offer and “yes” to a 9-figure offer two years later. The creation of the 9-step roadmap allowed me to maximize the value of my M&A advisory team.
Today, I pay it forward and help business owners master the 90-day Deep Wealth Experience. The goal of the 9-step roadmap and Deep Wealth Experience has you do two things.
First, you create a blueprint to maximize the value of your business. The strategies of preparation are the same for growth.
Second, you develop the certainty that you will capture the maximum enterprise value.
It’s not enough to assemble an M&A advisory team. Instead, it’s knowing what to do and when with your M&A advisory team that makes all the difference.
When done right, the value of your M&A advisory team is to help you secure the best deal instead of any deal.
What do you do, and where do you start?
Start with the first strategy and stay with it until mastered. Once done, move on to the next strategy. Do this for all five strategies.
You can do it. I know you can.
Here’s to you and your success!
Your Biggest Raving Fan,
When it comes to your liquidity event, are you leaving millions on the deal table? Visit www.deepwealth.com/success to learn more.