Lande Spottswood’s Post

Forbes Business Council member Adam E. Coffey has been where you are. He, too, dared to dream of that elusive billion-dollar exit. Then he took his companies to triple-digit growth. In Empire Builder, he shows you how to do the same. Read more: https://hubs.li/Q02nrmXR0 #BusinessGrowth #BusinessScaling #PrivateEquity

It's #MergersandAcquisitions Monday and the theme today is what #PrivateEquity leaders call "𝗖𝗘𝗢 𝗥𝗶𝘀𝗸..." Most #businessowners think the biggest issue in selling their business is how much money they will be able to sell their company for. In his book, "Things I Wished I Knew Before I Sold To Private Equity," Jason Hendren shares stories about business owners who sat in their cars crying immediately after the deal was closed. Why? Because they had focused so intently on closing the deal and the money, they hadn't thought about what life would be like after they were no longer in control of the baby they had built for years. They might still be "interim CEO" but they were no longer the real "boss" or influencer. The Exit Planning Institute did a survey and found that 75 percent of business owners profoundly regretted selling their business. Many business owners who chose to leave after selling to "do something different," thought that one easy option post-sale would be to get another job as a CEO of another company or in a Private Equity firm. They learned that it was not easy at all. They had not applied for a job in decades or maybe ever. PE firms seek continuity so will often ask or require the business owner to stay on for a minimum amount of time until they can implement the changing of the leadership guard. However, realizing the likelihood business owners who agree to stay post sale but then change their minds is high, Private Equity firms often have industry-knowledgeable interim CEO's in the wings ready to hit the ground running post sale. Private Equity works on a very tight post-acquisition timetable. They don't have the luxury of a talented but inexperienced leader. All this points to the need for business owners to not only get very savvy M&A advice pre-sale but financial and career advisors to help them with how to set their new life up as an "employee," - emotionally and mentally as well as tactically. I've spoken to several business owners who sold their businesses who were stunned by how lonely they felt after they had made "the deal of the their lifetime." Some dreamed of golfing every day, some dreamed of starting a new venture, and some wanted a job in their next chapter. All find their expectations are very different from reality. 𝘼𝙧𝙚 𝙮𝙤𝙪 𝙖 𝙛𝙤𝙪𝙣𝙙𝙚𝙧 𝙤𝙧 𝘾𝙀𝙊 𝙬𝙝𝙤 𝙨𝙤𝙡𝙙 𝙮𝙤𝙪𝙧 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙩𝙤 𝙋𝙧𝙞𝙫𝙖𝙩𝙚 𝙀𝙦𝙪𝙞𝙩𝙮 𝙤𝙧 𝙖 𝙨𝙩𝙧𝙖𝙩𝙚𝙜𝙞𝙘 𝙗𝙪𝙮𝙚𝙧? 𝙒𝙝𝙖𝙩 𝙬𝙖𝙨 𝙮𝙤𝙪𝙧 𝙗𝙞𝙜𝙜𝙚𝙨𝙩 𝙨𝙪𝙧𝙥𝙧𝙞𝙨𝙚 𝙥𝙤𝙨𝙩 𝙨𝙖𝙡𝙚? #VistageLosAngeles #sellingyourbusiness

My Dad used to watch the "6:00 News" with honorable consistency. Industry panels have become my routine replacing the 6:00 News. Tonight's Association For Corporate Growth - ACG Silicon Valley C-Circle discussion about the 2024 Outlook for Venture Capital and Private Equity with a "newsdesk" supported by a debt capital leader, an M&A investment banker, and a VC luminary was both informative and fun. (And, I came home with swag. 🧦) Andy Armstrong (Audit Partner at Armanino LLP) moderated the conversation across the panel and audience. Panelists included debt-dude Joel Gragg (Founder & Managing Partner at fitcapital), M&A maven Jan Robertson (Managing Partner & Co-Founder at SiVal Advisors LLC), and wise VC luminary Homan Yuen (Partner at Pine Road Ventures). Special thanks to the leaders at the JPMorgan Chase Innovation Center (thank you, Kristopher Duarte!) for staging our "newsroom" tonight and sending us home with snacks. __ KEY TAKEAWAYS __ 🟢 EXIT SUCCESS. What makes a company Green Light to a solid exit? #1 - a reasonable valuation (10-15x, or lower). Other contenders: A logical path to revenue. Compelling technology with a strategic buyer. 🟠 RUNNING A BUSINESS. We're no longer obsessed with "grow at any cost." Winning companies are often bootstrapped and run very efficiently. Discussions regarding "how we run the best possible business" are everywhere. 🟣 TIMING. "When the flowers are ripe, pick 'em." (Your Daddy is a smart man, Andy. I bet he watches the 6:00 news, too.) #ACGSV #investors #outlook

Stepping away from a company you built is really hard. You’re faced with a mix of emotions, not to mention a host of legal and administrative questions and concerns. Perhaps that’s why so many leaders put off planning their exits until the last minute. Yet delaying the inevitable only leaves the company and its stakeholders at serious risk of eventual failure. Read here how to manage your exit with grace. https://lnkd.in/gqTPJgzq #LLA #Sell #Buy

Stepping away from a company you built is really hard. You’re faced with a mix of emotions, not to mention a host of legal and administrative questions and concerns. Perhaps that’s why so many leaders put off planning their exits until the last minute. Yet delaying the inevitable only leaves the company and its stakeholders at serious risk of eventual failure. Read here how to manage your exit with grace. https://lnkd.in/gtb29q-X #LLA #Sell #Buy

Day 21: 𝗪𝗛𝗘𝗡 𝗘𝗩𝗘𝗥𝗬𝗢𝗡𝗘 𝗪𝗜𝗡𝗦 – 𝘁𝗵𝗲 𝗽𝗼𝘄𝗲𝗿 𝗼𝗳 𝗗𝗥𝗔𝗚 𝗔𝗟𝗢𝗡𝗚 𝗥𝗜𝗚𝗛𝗧𝗦 𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝗱𝗿𝗮𝗴 𝗮𝗹𝗼𝗻𝗴 𝗿𝗶𝗴𝗵𝘁𝘀? - Drag along rights (DAR) allow majority shareholders to require minority shareholders to sell their shares on the same terms and conditions as the majority shareholders (𝘵𝘰 𝘦𝘯𝘴𝘶𝘳𝘦 𝘧𝘢𝘪𝘳𝘯𝘦𝘴𝘴 𝘵𝘰 𝘵𝘩𝘦 𝘮𝘪𝘯𝘰𝘳𝘪𝘵𝘺 𝘴𝘩𝘢𝘳𝘦𝘩𝘰𝘭𝘥𝘦𝘳𝘴) when the majority shareholder decides to sell their stake in the company. 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗶𝘁 𝗱𝗼𝗻𝗲? - DAR ensures that majority shareholders can proceed with the sale of their stake without being obstructed by minority shareholders (𝘸𝘩𝘰 𝘮𝘢𝘺 𝘰𝘵𝘩𝘦𝘳𝘸𝘪𝘴𝘦 𝘳𝘦𝘧𝘶𝘴𝘦 𝘵𝘰 𝘴𝘢𝘭𝘦). (𝘛𝘩𝘪𝘴 𝘪𝘴 𝘪𝘮𝘱𝘰𝘳𝘵𝘢𝘯𝘵 𝘧𝘰𝘳 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘪𝘯 𝘢 𝘭𝘰𝘵 𝘰𝘧 𝘱𝘳𝘪𝘷𝘢𝘵𝘦 𝘤𝘰𝘮𝘱𝘢𝘯𝘪𝘦𝘴 𝘢𝘯𝘥 𝘧𝘰𝘳 𝘸𝘩𝘰𝘮 𝘴𝘮𝘰𝘰𝘵𝘩 𝘢𝘯𝘥 𝘤𝘭𝘦𝘢𝘳 𝘦𝘹𝘪𝘵𝘴 𝘢𝘳𝘦 𝘯𝘦𝘤𝘦𝘴𝘴𝘢𝘳𝘺. 𝘐𝘯 𝘴𝘶𝘤𝘩 𝘴𝘪𝘵𝘶𝘢𝘵𝘪𝘰𝘯𝘴, 𝘋𝘈𝘙 𝘱𝘳𝘰𝘷𝘪𝘥𝘦𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘤𝘦𝘳𝘵𝘢𝘪𝘯𝘵𝘺 𝘵𝘩𝘦𝘺 𝘯𝘦𝘦𝘥 𝘵𝘰 𝘴𝘦𝘭𝘭 𝘵𝘩𝘦𝘪𝘳 𝘴𝘵𝘢𝘬𝘦 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘵𝘩𝘦 𝘳𝘪𝘴𝘬 𝘰𝘧 𝘣𝘦𝘪𝘯𝘨 𝘣𝘭𝘰𝘤𝘬𝘦𝘥 𝘣𝘺 𝘮𝘪𝘯𝘰𝘳𝘪𝘵𝘺 𝘴𝘩𝘢𝘳𝘦𝘩𝘰𝘭𝘥𝘦𝘳𝘴 𝘶𝘯𝘸𝘪𝘭𝘭𝘪𝘯𝘨 𝘵𝘰 𝘱𝘢𝘳𝘵𝘪𝘤𝘪𝘱𝘢𝘵𝘦 𝘪𝘯 𝘵𝘩𝘦 𝘴𝘢𝘭𝘦.) 𝗙𝗼𝗿 𝗲𝘅𝗮𝗺𝗽𝗹𝗲: Imagine a VC firm holds 60% of a startup. A tech giant offers to buy the company at a great valuation. The VC wants to sell, but one minority shareholder holding 5% refuses to sell their shares, demanding a higher price. Without DAR, this refusal could jeopardize the entire deal. With DAR in place, the VC can ensure all shareholders exit together (securing the deal and maximizing returns for everyone). This is the reason investors insist on drag along rights, to have CERTAINITY in selling their stake (𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘢𝘯𝘺 𝘬𝘪𝘯𝘥 𝘰𝘧 𝘰𝘣𝘴𝘵𝘳𝘶𝘤𝘵𝘪𝘰𝘯𝘴). 𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝗱 𝗶𝗻 𝗰𝗼𝗺𝗺𝗲𝗻𝘁𝘀.

"If you invested $1,000 in X you would have made..." I hate these headlines. Here's why they suck: We've all seem them before. We all get a little FOMO from regret. But they always have the same problem: → They don't bring the full picture The top companies are at the top from success. Which makes them less risky to invest in. But leading up to that? → It was WAY riskier Some companies even hit bankruptcy before they got there. That doesn't mean you can't invest in early companies. But don't think they all follow the same road. In fact, that's what history tells us. Take the S&P 500 for example. Of the original 500 that were added? → Only 94 of them currently remain. And every year 20-25 are replaced each year. The rest either have fallen off or filed bankruptcy. → Choosing only winners while overlooking the loss is what we call "survivorship bias". This doesn't mean you shouldn't invest in companies. But you should consider the risk of each one. For the top companies to stay at the top? Many more had to fall along the way. Don't just cherry pick the winners. History never repeats itself. → But it does rhyme. Invest with caution!

My partner, Eric Amar shares key insights into the vision behind Accelerated Wealth Partners. We're excited to offer a fresh partnership model for dynamic RIAs looking to accelerate their growth. If you’re interested in learning more about our story and vision to be a true growth equity partner, let’s connect!"

I talk to so many founders being approached by Private Equity buyers EVERY DAY! It’s overwhelming, and most of them are both energized and scared of doing something wrong… So, what’s my advice? Let’s dive in… Pros: 1. Deep Pockets PE firms have serious capital. They can provide the resources you need to scale rapidly. Think new markets, acquisitions, or major upgrades. 2. Expertise in Tap These aren't just money guys. PE firms bring a wealth of operational and strategic knowledge. They've seen it all before and can help navigate complex challenges. 3. Partial Exit You can often sell a portion of your business while staying involved (and seeing the upside). It's a chance to de-risk personally while still driving growth. 4. Network Effects PE firms have extensive networks. This can open doors to new partnerships, customers, and talent. Cons: 1. Loss of Control Be prepared to share decision-making. You’re no longer the only one at the table. PE firms will have a say in major strategic moves. 2. Short-Term Pressure PE typically aims for exits in 3-7 years. This can create pressure for rapid growth at the expense of long-term planning. 3. Cultural Shift The laid-back startup vibe? It might not survive. PE often brings a more corporate, metrics-driven culture. 4. Potential Job Cuts PE firms often streamline (or centralize) operations. This can mean tough decisions about staffing. 5. Complex Deals Get ready for intense due diligence and complex deal structures. They are full-time hunters, and you’re the part-time prey. Selling to PE can supercharge your growth and provide multiple liquidity events (if done right). But it comes at a cost. There's no one-size-fits-all answer. Your decision should align with your: Vision. Personal goals. Readiness for a new chapter. Choose wisely. Because your legacy is on the line. Need advice? Drop me a DM, and let's start a conversation. P.S.: Follow me for more content like this.

It was such a small mistake but it caused so many problems. ... A thriving event business run by a husband and wife, later joined by two friends with the perfect mix of skills. For years, they enjoyed success, seamlessly working towards a well-planned exit strategy. Yet, beneath this success, a crucial detail was overlooked— a shareholding agreement. When we asked about the specifics of their share structure, it was revealed: no formal agreements were in place. This seemingly small oversight from the beginning now posed a huge problem. This meant that for the two later partners to buy in was going to cost a lot more than they ever anticipated and leave a huge tax problem for all. This oversight led to arguments and disagreements and ultimately the potential unravelling of what was a great company. The worst part is this could all have been avoided if they had sought outside expertise early. A stark warning and lesson to others.