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The Paradox of Preparation: How to Plan and Execute a Strategic Exit

In today’s rapidly evolving M&A market, the timing of a deal is a critical component of a successful exit – perhaps now more than ever before. New investment capital presents an unprecedented range of lucrative opportunities; however, premium valuations are allocated for premium assets. 

This creates something of a paradox, wherein entrepreneurs pursuing a high-value M&A transaction must choose between preparing for an exit and continuing to grow their businesses. Aggressive short-term growth initiatives can increase valuations and are critical in sustaining daily operations.

On the other hand, process dictates the outcome. Advanced preparation can help founders earn the maximum value from a potential sale but requires dedicated attention most can’t afford to spare. Therefore, in order to successfully navigate the M&A process and secure the best possible deal, business owners must learn to strike the right balance between the two.

Taking steps to prepare for a successful M&A transaction

Incorporating Priority Initiatives Into Your Planning Stage

Prioritizing key growth initiatives is an important part of developing an effective strategy to earn the maximum value for your business. Historical and proforma financials reflect performance, which factor into the price prospective acquirers are willing to pay. Thus, in order to secure the best deal possible, it’s important to prepare accurate financials that demonstrate your company’s sustained upward trajectory.

Begin by ensuring any licenses are in order, operational blueprints are up to date, and any plans for future expansion are recorded via product road maps, executive memorandums, etc. Private equity and corporate strategic investors are not only interested in what you have already achieved; they want to see what you are presently doing to grow the business.

The Benefits of Building a Brand

To effectively convey this information, it’s important to first determine which initiatives will resonate best with the market. We encourage our Clients to consider every facet of their business as parts of a cohesive brand, then explore ways to either improve that cohesion and streamline operations or add value for the acquirer of the established business.

Building out a brand is a long-term endeavor that establishes permanence, which is especially attractive to private equity and corporate strategic buyers. It reflects a clear vision for future growth and whether the initiatives you highlight are in process or simply outlined on a roadmap, this reassures prospective acquirers that they will see a return on their investment.

Leveraging Untapped Growth Opportunities to Pique the Interest of Prospective Acquirers

Of course, outlining your objectives is only part of the equation. You must also take concrete steps towards achieving each goal such that the results validate your approach. Otherwise, you should ensure that your previous successes are sufficient proof to encourage prospective acquirers that there is still potential to continue expanding and scaling the business.

Advancing beyond preparations and taking action is crucial, but you likely don’t have the time or resources to pursue every initiative that comes to mind. The solution is to choose the initiatives most likely to help you maintain momentum while continually sustaining growth. All other initiatives you’ve planned for become opportunities for the company’s new owner.

How You Can Overcome the Paradox of Preparation

Just as you can’t pursue infinite growth initiatives, you also can’t afford to lose momentum and get stuck preparing indefinitely. Doing so risks allowing potential high-value M&A transactions to pass you by and if performance suffers in the interim, your business could actually lose value. Needless to say, this could seriously impact your bottom line.

A superior alternative involves preparing intelligently as outlined above, then retaining the services of an experienced Investment Banking professional. Your intermediary can guide you through the M&A process while preparing offering materials and vetting prospective acquirers on your behalf. Consequently, you’re able to proceed with confidence.

A professional approach empowers you to execute on the strategy you’ve worked carefully to prepare without diverting your attention from the day-to-day operations of your business. You don’t have to worry about juggling responsibilities throughout this stage of the deal because everything is expertly managed for you, from start to finish.

And because your Investment Banker has their finger on the pulse, you can anticipate trends and identify the optimal moment to walk away from your business – having secured the maximum value for the asset you’ve built. After all, you deserve to know you got the best deal possible and that your financial future is secure so that you can pursue what comes next.

Pursuing Your Ideal Exit

High-value M&A transactions are becoming increasingly complex and navigating the business sale process requires a degree of expertise and finesse that most founders simply don’t have. While there are some preparations you can make yourself, it pays dividends to secure the services of a qualified Investment Banking professional who can assist you in reviewing all pertinent information.

Moreover, an Investment Banker can execute each stage of the deal on your behalf with minimal input from you, allowing you to focus on what matters most. Don’t miss out on the opportunity of a lifetime, put your plan in motion by reaching out to one of our Advisors today!

About Global Wired Advisors

Retaining an experienced Investment Banking professional is the first step in securing your financial future. Global Wired Advisors combines decades of transactional and operational expertise to provide institutional-caliber service to our Clients while helping them earn the maximum value for their digitally native or Amazon FBA businesses. If you’re considering a sale, or if you’d like to learn more about our process, click here to connect with one of our Advisors today!

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