"埃德·沃德（Ed Ward）如何创造世界'密尔沃基最大的凯尔特节日" from 你是怎么做到的? by WUWM 89.7
Don Valentine是硅谷的传奇人物。 他不仅是一个创新的投资者，而且他的远见卓识在其他人犹豫不决的时候跳了起来，并且很早就了解如何指导和鼓励年轻的企业家。 华尔街日报 贡品体现了他的精神。
我们偷了他的想法 "Sequoia Scouts" program. It'对他的才华和领导才能表示敬意。
他与史蒂夫·乔布斯（Steve Jobs）和诺兰·布什内尔（Nolan Bushnell）的关系非常有影响力和形成性。
（如果你'd like to hear Don'用自己的话讲故事 "Something Ventured," a 2011 documentary. Great movie.)
He'll be missed. 或者，正如爱尔兰人所说，"We'我再也看不到他的样子。"
For leaders of private, closely held companies, selling the company is an important and critical event in their lives. There are several important considerations in managing the sales process to maximize results, avoid both delays and failure to close, all centered around preparation for the entire selling cycle.
Extensive experience underlines the expectation that an auction process is the best process for achieving a good outcome. Of course, experienced buyers sometimes try and convince sellers not to hold an auction for a variety of “reasons.” The end result, intended or not, is usually much lower price and poorer economic terms for sellers.
In an auction process, the seller - or most likely, their investment banker, will prepare an offering document, (including a non-disclosure agreement) circulate to probable interested buyers, solicit bids, pick two or three of the best to negotiate with, and come to an acceptable, and painless close.
这里’s how in five steps.
It’s important for the seller to be informed about what the current market pricing is for similarly situated companies, and what the components of that price are. A thorough review of comparable market transactions will include an understanding of which specific metrics support the most attractive multiples in the market. (and the more recent the better.) This begins with customer acquisition costs and resulting lifetime value and may include earnings as a percent of sales, revenue growth over time, sustained growth rates, sales per employee and other industry-specific metrics. Investment bankers and industry trade groups are good sources of this kind of information, for instance.
基于这些事实，发展买家对您公司的看法。 如果卖方在这里有任何疑问，请考虑进行卖方的收益质量分析。这将帮助您通过卖方查看收入's point of view.
If financials are not “clean” this is a great time for sellers to remove extraneous expenses and balance sheet items, such as shareholder loans, non-operating assets, and the like. If possible avoid major adjustments on the P&L. This may mean operating for a year or more prior to a sale offering if the seller needs to remove personal items from company expenses. Buyers will look past these items for an excellent company, especially in a competitive situation, but their presence leads to deeper questions about other potential pitfalls and variances.
Build the sale offering based on this information. This will include the unique story of the company, its growth opportunities and its position in the market as well as its place in the comparables list based on its performance against these industry metrics. Highlight company strengths and opportunities and identify known risks. Proactively explaining risks and mitigation plans and achievements is a highly valued trait of successfully acquired companies.
In today’s acquisition environment, one of the biggest differentiators can be the company’s ability to describe customer acquisition cost and lifetime value objectively. Many companies only allocate marketing budgets based on some percent of sales and don’t adequately differentiate between the cost to get a new customer and the much lower cost to retain them and describe their long term profitability. Buyers who see this data will be more comfortable with growth projections that are based on objective data-driven historical facts.
建立一系列的价值期望并仔细审查当前情况， 买方可能会建议的可比较条款。 一些重点包括：
Consult your tax advisor at this stage about tax implications of various seller requests, such as asset vs. stock sales, favorable tax treatments available with certain sale structures, and so forth. I’ve seen situations where these tax consequences more than made up for lower overall valuations. We’ve recently participated in a private transaction that was QSBS (Qualified Small Business Stock, a federal program) eligible and was exempt from Federal capital gains tax.
A sometimes overlooked area is the “holdback,” a portion of the purchase price held in escrow for some agreed to time period. This money is intended to be used to guarantee the accuracy of the seller’s representations and warranties about the business. In a competitive market, and where the purchase prices exceeds $10MM, a seller may consider asking the buyer to purchase insurance to cover this guarantee. It’s expensive (2% to 5% of the holdback, generally) and comes with an underwriting fee in the mid five figures. It also has limits as a percentage of the purchase price (10% in many cases), and may not eliminate the need to hold back a portion of the proceeds as well. However, it helps assure the holdback will be returned as the underwriting requirement brings a lot of objectivity to the holdback negotiation.
This portion of the purchase price is held in escrow until certain agreed upon milestones are met. This is similar to, though not the same as, an earn out. A milestone payment may be predicated upon a completed future order, the retention of certain customers, or similar objective requirements. Competitive bidding can reduce the size, complexity, timing and quantity of milestone payments.
盈余付款基于财务业绩的实现。 例如，付款占未来EBITDA或收入的百分比。 基于不受卖方售后控制的未来财务业绩的盈余通常是有争议的且有问题的。
Because private equity transactions are normally leveraged, buyers will often ask sellers to be the most subordinated lender in a transaction. Again, a competitive process may reduce or eliminate the need for a seller to accept this. In reality, a seller note is often structurally similar in risk to a preferred equity with a fixed interest rate without the potential equity upside.
If the seller who would own reinvested equity is leaving the company post transaction, and is being asked to take some or all of the proceeds in stock, a clear understanding of the terms of the new equity is essential. If the new owners have the ability to dilute the stock in the future, or in other ways reduce future economic benefit, it is important to seek agreement about how the equity will be redeemed, under what circumstances, and when. Sellers should be fully acquainted with the risks associated with holding equity, as well as with the potential upside.
There are good reasons for a seller to enter into an exclusivity provision in negotiations. If the seller has seen several offers and has quantitatively-based reason to believe these offers are representative of the market price, is satisfied with the proposed price and terms, and the buyer has demonstrated consistent, documented, trustworthy behavior, a provision to enter into an exclusive negotiating period may reduce burdens on management, speed the transaction and build toward a good relationship. It also potentially reduces information leaks that may be harmful to the company in the event of a busted transaction.
However, exclusivity periods can be used to stall while watching performance, especially if managers are distracted by the process itself and valuation discussions have included forecast results in the next quarter or two. Disclosing information can be used to squeeze the company during the same process.
Buyers who believe exclusivity makes sense in a given negotiation may consider limiting their exposure to risk by limiting the time period to very short intervals, and requiring reaffirmation of price and terms at each (biweekly?) time period. If there is any slippage, consider reopening conversations with others.
（在一种情况下，卖方向投资者披露了'和员工的退出意愿。 此外，卖方的资产负债表并不健全。 买方要求并获得了独占期，可以直接与主要经理接触。
As sales fell and cash pressure built, the buyer lowered the offer and in the end the company accepted a 50% reduction in the sales price as an alternative to running out of cash. Part of the leaders rationalization for doing this was the promise of a bright financial and career future at the acquirer. A year later he was suing them for wrongful termination.)
In retrospect, the right answer here was to develop more alternative buyers and only then, if the original buyer was still favored, to agree to a short, exclusive diligence period. A reference check may have provided information about the aggressiveness of the buyer. It wasn’t done either. Of course, agreeing to full employee access coupled with the “stop selling” decision and lack of good advisors are all mistakes.
Decide what the minimally acceptable price and terms are, considering the factual information gathered. Then build an alternative plan contingent on the inability to obtain a desirable transaction. Included in this thinking should be a broader definition of selling to include leveraged recapitalizations and family succession planning.
The ability to continue the business, strong capitalization and an excellent sales force, product development, positive cash flow and marketing plan are substantial components of an alternative scenario. AQ detailed understanding of customer acquisition costs is a central part of this plan. The unfettered ability to simply continue the business, especially when obvious to buyers, is a strong alternative. More cash enhances seller alternatives and diminishes buyer power.
(Recently, a buyer, late in the process made an 11th hour reduction in price believing the company had no good alternative. The well-prepared seller presented his alternatives and explained that they were all superior to a reduced price. The buyer withdrew his offer, walked away and returned three weeks later, reluctantly agreeing to the original terms.
The seller explained that the alternatives were working pretty well and raised the original, previously agreed to, price. The buyer complained, but complied. This was all based on having that real alternative locked and loaded. The seller had also designated one person - not her - to negotiate with the seller. This layer of separation provided time to continue to grow and manage the business free from transaction distraction. Interestingly, it also increased the buyer’s respect for the business and its management.)
Ask knowledgeable advisors what information the buyer will likely ask for. (If you were buying rather than selling, what would you want to know?) Use standard diligence checklists to thoroughly review all possible information requests. Prepare this information carefully, and cautiously.
Standard disclosures include financial matters, customer centric data analysis, an overview of intellectual property, customer sales history and contracts, supplier agreements, litigation history, employment contracts, practices and issues; past and current performance to budget; tax matters; regulatory issues and insurance, for instance.
Savvy sellers and their advisors can, and usually should, disclose information in layers. Summary data about employees, customers and suppliers can be provided initially, for instance. However, access to detailed information and access, for example, to employees, customers and suppliers shouldn’t come until late in the process. A best practice would be disclosure of sensitive information tied to final buyer commitment.
Sellers need to be cautious about the actions of the buyer related to information they’ve gained in the process. For instance, it’s possible for buyers to influence employees and create divergent incentives in the post sale period. These incentives can potentially cause the employees to create pressure on sales price and terms. Sellers should assure themselves that management incentives are completely aligned with the seller’s goals for the transaction.
（卖方的公司发展非常迅速。 卖方在下一季度的预算销售增长将达到20％。 买家提交了要约，领先买家发现了第二高的出价者的价格。
The buyer extended the diligence process till the end of the following quarter and built an acquisition model using the sales growth as the primary factor in the price. When the distraction of the transaction caused sales to slip, the price was reduced by the buyer to just more then the second offer. The company sold for about two-thirds of the original sales price and eventually, post transaction, doubled market share.
Be aware that a substantial portion of diligence is the seller himself. Buyers assess not only negotiating strengths and weaknesses but also personal goals and aspirations. That process can also form the basis of a good working relationship going forward. Sellers who can get comfortable with honest and appropriate self disclosure can be disarming and help achieve a good outcome. Of course, several competitive offers make self disclosure less risky!
Sellers should always ask for and check buyer references early in the diligence process. Thorough vetting will assure sellers of the quality of offer and background of the buyer. Buyers who are motivated to build strong relationships as an essential part of a good business will welcome sellers who take these actions.
他们可能是公司董事，顾问，投资者，律师或会计师。 这可能包括审查买方的要求，卖方的决定，条款和风险。 事先同意谁需要批准谈判条款。 计划短期审查请求和会议。
Consider informing the buyer that you have to seek approval from your advisors for proposed terms and concessions. In this way, you buy yourself time to carefully consider requests. The discipline created by agreements to review steps with advisors, even if they do not have decision making authority, can create a safety valve to avoid pressure to make decisions hastily.
Expert intermediaries should have very good knowledge of the market and be able to identify buyers and their appetites and risk profiles as well as their typical deal terms. They make money by getting better prices and terms for sellers. One major component of their process is to bring multiple buyers to the table and add their expertise to help balance the relationship between buyer and seller.