Market Value Analysis
At the beginning of our relationship with clients, one of the first things the client is looking for is a determination of the market value of the owner’s tech, digital or Internet Business. Having represented over 2,000 business owners on transactions of all sizes up to $100M, and being identified as thought leaders in this space, we own the world’s largest database of comparables and know the value range of all companies in the tech, digital and Internet space.
This helps us determine the highest possible Enterprise Value for a company. We work with the client to identify all of the company’s differentiating factors and to ensure the company’s financials are in good shape for a sale to maximize deal value.
Recognizing key value propositions is a key factor that has helped us achieve unprecedented success in this sector, and to become the world’s largest M&A tech & Internet broker to the lower middle market and SMB space. Because we are serial entrepreneurs in the tech space ourselves, we know what to look for with a company’s operations and its value propositions to buyers.
Additionally, we work hand-in-hand with each owner to get their feedback on what they see as differentiating factors in their business – those value propositions that others in the category might not have. During the onboarding process, we work with our clients to find ways to represent the business on the market in a light most favorable to the business. We also help clients by consulting on opportunities to better improve the company and/or its KPIs before the exit process begins.
From initial conversation to closing, is important to timely help with all facets of the transaction. Availability, personalized service and quick turnaround are keys to our firm’s success. And not only do the deal intermediaries make themselves high available throughout the process, but the Website Closers principals are readily available to assist when needed, especially when a deal breaks down – which is common in M&A. We believe that time is of the essence, and while some of our hair might be greying, we don’t do business the old-fashioned way – we are fast, aggressive and push hard to close deals.
Our firm is operated like a law firm where the principals of the company are highly involved with deal intermediaries to ensure that they never run into problems on their own – this ensures a high level of competence and capability throughout the process and ensures that a team approach is used when a deal breaks.
We assist business owners with the process of preparing the business for sale, including any help necessary on the creation and analyzation of financial models to match market valuation and work on ensuring all financials and forward projections are clean and ready for market analysis and review. We also coach and prepare business owners for initial buyer/seller conversations.
Many clients come to us to help them strategize on the best possible time to take their business to market. We will sit down with the client, put together a plan that works for the client’s timeline, and peg a date for execution of the strategy. Business owners find this useful because they tend to be goal-oriented and this process helps them focus on an end-game.
There are times when a business owner would like to consider a sale but might need several months or a year before they are ready or they would like to better prepare the business to be attractive on the market and they look to us for counseling.
We will work with the client to ensure that, as a team, we create action items for the business owner to undertake before we go through the exit process. We know that instituting such items into a business model can make the business even more attractive, and achieve a higher multiple when it does actually come time to sell. The nice thing for clients is that our expertise as thought leaders in this space is free of charge since we don’t charge any upfront fees – we are 100% success-based, meaning we only get paid when the client gets paid.
Keeping the client informed and updated is important. While a lot of the work associated with the process of selling a business occurs in the background, we work with clients on an ongoing basis to keep them abreast of the process. And during the diligence phase, we control communication by requesting weekly calls with all parties to the deal to ensure the process continues to move at an acceptable pace. We also manage and facilitate all buyer and seller communications so that the parties keep a positive working relationship while we handle all negotiations on behalf of the client.
Even though we’ve seen hundreds of deals come across our desk, every business is different – each has its own individual fingerprint. We dig in to understand the company’s operational model in order to properly address lenders, suitors, accountants, attorneys and diligence teams – as Internet entrepreneurs ourselves – we can help a great deal with explaining how the company works, from the inside out to all of these 3rd parties.
It is important that we understand the “thing” that makes the company special – and even though we don’t want to provide the special sauce to interested buyers until we are closer to closing, knowing this “thing” can help us elevate a deal from boring to exciting.
We prepare all teasers, pitch decks, executive summaries and offering memorandums, as needed, for our clients. We use a systematic approach to providing only the necessary data to prospective buyers to interest them, not to bore them. We take input from our clients when creating this collateral, and through this collaboration, provide an in-depth, but only high level, analysis of the company that highlights the company’s value propositions.
We take the confidentiality of our clients’ information serious – to this end – we require potential suitors to execute a Non-Disclosure Agreement (NDA) before they can see any detailed information on a business, including the business name. We make it difficult for any potential buyer to link a teaser to a particular business – they will need to execute an NDA to get that kind of detail on one of our clients.
On a confidential basis, without providing any information that could lead a potential buyer to the business being sold (without first signing an NDA), we will advertise & market the target worldwide using a “value prop teaser” on over 10 M&A Networks across the world (and over 150 websites throughout those networks), send email newsletters to our buyer lists (over 100,000 active buyers), post on our Facebook Page (over 360,000 Followers), post on our Web Page (where many buyers have RSS feeds set up to see real-time listing data), and direct market to a close nit group of VIP Buyers.
All in all, we touch over 850,000 buyers throughout all of the networks and internal domains we operate on. This massive buyer pool is another factor that has led to our massive success in selling tech companies for the highest possible multiples in the space. If there is a buyer looking to buy a tech, digital or internet company anywhere in the world, rest assured that they are monitoring our listings. On average, we receive over 125 responses to each listing that goes to market. For us, finding a solid buyer for a company is never the hard part.
We believe in using other people’s money to get deals done – in fact – we have a large number of lending partners that can do deals in the tech, Internet, and digital space, regardless of size – from as small as $500k to as large as $100M. We handhold buyers throughout the lending process, and control their interactions with underwriting teams to ensure they don’t make mistakes.
A buyer that goes directly to a lender on their own has a very low likelihood of success, but one that works with us and our lending partners will be in a much better position to be successful since we do hundreds of millions in bank loans every year. While our clients are not heavily involved in this process, this part of the process is extremely critical to the closing process.
This part of the process is one of the most important – because if a buyer isn’t properly qualified, he/she can waste everybody’s time (the client, our firm, lenders, etc.) and never close. Roughly 90% of all people that look into businesses to acquire them NEVER BUY A BUSINESS.
We know this and we take that low threshold seriously. To this end, we go through a rigorous process with each potential buyer to ensure that they have the financial capability to actually close on a business and have actual sincerity in buying a business. Potential buyers are not presented to business owners until they are vetted and show that their internal requirements and capabilities match with the expectations of our clients.
During the process, one or more offers will come in. We go through each offer received with our clients to explain what each provision means and to analyze pros/cons. If there are multiple offers, we help to determine which buyer is best suited from a personality, financial capability, and overall standpoint. As an example, there are times when it might make sense to go with an offer that actually is lower in enterprise value, but better in long term vision. We go through all of this with our clients so that they can make an informed decision before taking the big step of going under contract with a buyer.
We have a set of template documents for just about every situation that we provide to our clients and buyers to help facilitate the process. This can help keep expensive lawyer costs down. These docs are more focused on the tech and internet world so that when lawyers are finally added to the process, there’s very little need to add specifics to the documents as it relates to this space.
We assist with the process of putting a prospective buyer and business ownership under contract (usually an LOI). Once under contract, we create and manage a full service, secure data room for the sharing of information and to manage the facilitation of diligence items. Oftentimes a lot of questions arise from our clients on how to answer diligence questions – we help provide guidance, which in the end helps make the entire diligence process smoother.
During the due diligence process, it is key to have somebody on your side to keep the momentum of the deal going. After the signing of an LOI, we kick off diligence by arranging a weekly, recurring conference call to keep buyers, sellers, diligence experts and attorneys on task and working towards closing. We are the “whip” of the deal. We also work closely with lending partners in the deal to ensure that all of the underwriting boxes are being checked to get us to closing. We control this entire diligence process from start to finish with a goal to close a business as quickly and efficiently as possible.
Virtually every deal breaks multiple times during the exit process. On average, a deal will break nine times before it closes. A break can be anything from a buyer getting cold feet because they perceive a risk that can easily be explained once we jump in to help, or it can be a complete break where a buyer walks away; roughly 30% of the time that a buyer completely walks away from a deal, we get them back to the table and close. Emotions run high and a lot of money is on the line – our skills in psychology, negotiation and deal-making make the difference when dealing with deal breaks, which has been a centerpiece to our success. We put out fires and rebuild very quickly – every single day.
We connect buyers and sellers to attorneys that both understand the tech, digital & Internet world, but also focus on closing a deal – not breaking it. These are real deal makers. These attorneys understand this space extremely well and have helped close hundreds of deals. They can either act as a transactional attorney for the deal (not representing either party) or they can act as an attorney for a party. They can also handle escrow. Our attorney referrals can handle 100% of all legal needs that come up during the sale of a business.
We connect both parties to tax specialists when requested as well – these are people that can help both buyers and sellers navigate opportunities to reduce their taxable footprint and/or minimize the amount of tax to be paid during the sale process.
All team members at our firm are experts at negotiation. In addition, the firm has an advisory team made up of highly experienced and knowledgeable tech & Internet entrepreneurs, business owners and M&A advisors to jump in on any deal to help facilitate negotiations. This “load the room” tactic helps countless times to get the very best deals for our clients.
Negotiations occur at many different times during the M&A process, including when formulating the LOI, when discussing risk profiles found during diligence, when the definitive agreements are being drafted and when debt and equity providers are active in the background. This key expertise is a factor that has driven our success in this space and made us thought leaders around the world.
During the sale process, at various times during the stage of the deal, money may need to exchange hands, from deposits to holdbacks to escrow. We connect our clients to experts in the space to assist with the flow of funds in each deal to ensure they are done timely and correctly.
Prior to closing, the parties will get together to discuss what the transition of the business should look like after closing. We help the parties think about this process, and to put a plan together to efficiently transition the business to the buyer. We understand that transition can be stressful, but by putting a plan together with a timeline, and using our expertise in having worked on so many of these over the years, all parties can be on the same page and transition can move smoothly through the process.
Ultimately, after diligence is complete and the definitive agreements are negotiated, it is time to sign the purchase agreement, fund the deal and proceed to closing. We are there every step of the way to ensure that all boxes are checked with the banks, equity providers, attorneys, accountants, due diligence experts and anybody else on the closing committee.
Things always come up at the last minute – but not to worry – we will always be there for you.Contact Us
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