How We Work

In order to achieve a successful end result, one must have a process and the discipline to adhere to it. The confidential sale of a business is no different. Given what we must do on a consistent basis, what is at stake, combined with the variables and complexities involved make having a well-structured process paramount.

The ValueCap sell-side process is designed to maintain confidentiality, maximize efficiency, reduce risk and improve the chance for an optimal end result. We call our process, The Five Ps.

Preparation

Most of our sell-side clients have profitable and reasonably well-run businesses. While those things are beneficial, they do not guarantee that the business owner has created an asset with transferrable value. We help our clients understand the distinction and educate them on what drives value in business. If necessary, we can assist our clients with improving specific value drivers within their business in an effort to increase the business’ valuation.

Packaging

This step involves the creation of materials used in the confidential marketing and sale of our client’s business. It also includes a comprehensive data set that will be needed for due diligence. These are things like licenses, permits, titles to vehicles or equipment, corporate and financial records, leases, and much more.

In some circles, the primary sales document is referred to as “The Book”. In more technical terms it’s the CIM (sim) (Confidential Information Memorandum) or CBR (Confidential Business Review). It includes things like: an executive summary, business overview, products, services, business highlights, owner’s role, staff, industry analysis, location, service area, SWOT, buyer opportunity, picture gallery, and a financial summary. Additionally, a good CIM will also tell a story – this is your first impression to influence potential buyers to learn more.

Two other documents that augment this sale process are a custom non-disclosure agreement and a Confidential Business Summary, aka the Teaser. The Teaser is a short blind-ad styled document that highlights a few key points. It’s used to pique interest prior to executing the non-disclosure agreement.

Project Management

The acceptance of an offer is an important milestone. It triggers the due diligence phase but does not guarantee the deal gets to closing. In fact, most deals that fall apart do so in due diligence. For that reason, we are adamant about being fully prepared before going to market.

Due diligence requires a great deal of additional information to be shared, and action items to be completed, some of which are time sensitive. Complicating matters is the coming together of the buyer’s and seller’s team of advisors. Try asking a group of strangers, some strong-willed and some not so skilled, to suddenly function like a team and see what happens. Our process keeps us on point while coordinating communication and activities with the buyer, seller, their attorneys and accountants, spouses, or partners as well as the bank on the buyer’s side.

Our process enables us to herd the cats, avoid friendly fire, manage a long list of items and ultimately get the deal closed for our client.

Summary

Obviously, this requires patience, endurance, tact, and a tremendous amount of technical expertise. Our 5 Ps process enables us to herd the cats, avoid friendly fire, manage a long list of items and ultimately get the deal closed for our client.