FOR BUSINESS OWNERS
Selling, recapitalizing, raising capital and waiting are four options with different consequences.
Most owners arrive with a question rather than a decision: what the business is worth, whether this is the year, and what changes if you sell part of it instead of all of it. This page sets out the options and the consequences of each one. If you are two years early, we will tell you so. That is a real recommendation, and we do not use it as a polite way to end the call.
WHAT OWNERS ASK FIRST
Four questions owners ask before a process starts.
None of these commit you to anything, and none of them need a banker on retainer to answer.
What is the business worth
A multiple from a trade publication does not answer this. The answer is what a buyer would pay for this business, and which parts of it they would discount on the way to that number.
We are twelve to twenty-four months out
You are not selling this year. The useful work now is fixing the issues a buyer would use to negotiate the price down, while there is still time to fix them.
Someone called about buying my company
One interested buyer does not set a market price. What the approach is worth depends on whether other buyers are also looking. That competition is arranged before you respond.
Will my employees find out
Who is told, in what order, and at what stage is a decision about how the process is designed. It is made at the start and written down, so nobody has to work it out halfway through.
THE OPTIONS
Three ways to proceed with a transaction.
For an owner ready to exit
A full sale, or a majority recapitalization
A sale of the whole company, or of a controlling stake with the owner staying in for the next phase. The mechanics are close to identical. The difference is how much of the money is paid at close and how much depends on performance after it.
- A buyer list built for this business rather than pulled from a database
- The headline price and the deal are different numbers, and the difference gets explained before you sign
- A written checkpoint at each stage, so you always know what happens next
For an owner who wants to keep control
Growth capital, or debt
Capital raised against the business instead of a sale of it: senior debt, unitranche, or a minority equity stake. Each is structured so control stays where you want it and the reporting obligation is one the company can meet.
- Minority equity with governance terms negotiated rather than accepted
- Debt priced against what the business can service, not against a growth case
- Structured so a later sale is not made harder by the money you take now
For an owner preparing rather than selling
Exit readiness, twelve to twenty-four months out
A buyer reads the financials with an accountant and the systems with a specialist. The technology, data, and security side is the part most owners have never had examined. It is also where buyers argue for discounts.
- The buyer's own technology diligence run against your business first
- Findings ranked by what each one is likely to cost you in the negotiation
- No obligation to run a process at the end of it
Which one fits depends on what you want to keep: the company, the control, or the capital. An owner who intends to run the business for another five years is not a sell-side client. The first conversation should say that plainly instead of starting a process anyway.
IF YOU ARE NOT READY TO SELL
What to do while you wait.
An owner who is not ready should not be in a process. A firm that recommends one anyway is selling you a service you do not need. The useful work now is finding out what would raise the valuation and how long that would take. Each of these runs in about ten minutes and produces a written result you keep, with no call attached.
Live · ~10 min
Exit Readiness Scorecard
Whether this business would be ready if a sale process tested it today.
Run itLive · ~10 min
Enterprise Debt Index
The debts in the business today that a buyer would price in.
Run itLive · ~10 min
CEO Diagnostic
Where technology and execution are limiting enterprise value.
Run itLive · ~10 min
Tech Debt Cost Calculator
What the deferred work costs over a year, in dollars.
Run itFrequently asked questions
What owners ask on the first call.
- What is my business worth?
It depends on what a buyer would do with the business and which parts they would discount. Anyone who quotes a multiple before reading the financials is guessing. Those guesses usually overstate the value.
- Someone has approached us. Should we take the call?
Take the call and say nothing about price. Then decide whether to run a process, because a single interested party has no competition to price against and knows it.
- Will my employees find out?
Not from us. Who is told, in what order, and at what stage gets decided before anything goes out, and the buyer list is built with that decision in mind.
- What should I fix first if I am a year or two out?
Usually the things a buyer can verify without asking you: customer concentration, the quality of the financial reporting, and whatever in the systems and security posture would need a caveat. Which of those matters most depends on the business, and it is the first thing a readiness assessment answers.
- We may not sell at all. Is a conversation still useful?
Yes. Ending with a decision to wait is a normal outcome here. Knowing what would change the answer, and how long that would take, is more useful than a decision made on somebody else's deadline.
Start a conversation
Tell us what you are weighing and your timeline.
A few lines on the business, what you want to happen next, and the timeline you have in mind. You get a straight answer on whether a process makes sense now, later, or at all.
Bass Zanjani leads M&A Advisory and reads every brief. If the answer is that you should wait, that is what you will hear.