We have met thousands of business owners over the years, both in developing their optimal exit strategies and through our executive conferences. What these meetings make abundantly clear is that many do not understand what M&A can do for them and their companies. It is not simply about selling it to the highest bidder – our team Generational Equity goes far beyond that.
From building strategic partnerships with interested investors, to our Roadmap to Enhancing Value (REV), we help business owners achieve their ambitions in several meaningful ways – not just exit for the optimal price.
That leads onto the topic of this piece: the partial sale of your business. Perhaps you aren’t interested in selling 100% of your company. Fortunately, selling does not need to have an ‘all-or-nothing’ approach. Partial sales have grown in popularity in the middle market as a way to fund overall business growth.
For example, a few years ago we helped create a partial sale structure for the owners of Orbis Logistics, allowing them to retain partial ownership and participate in the future growth of the company by partnering with a platform company funded by a private equity firm. This approach can prove beneficial to company owners lacking the capital to pursue their ambitions in any sector, whether you choose to sell a company asset or a percentage of the business as a whole.
The real benefit of a partial sale is this gives you the capital to grow your business to the level you want to be at. In this situation, an M&A advisory firm would identify buyers that are interested in partnering with you and retain you post-acquisition in a minority ownership role. Once this investor has been located, it will be a case of determining the right deal structure that both parties are happy with, from determining what roles you will take in the company’s direction to the incentives on both sides.
With the right advice and guidance, such as what you’d receive from our skilled dealmakers at Generational Equity, a partial sale can be the perfect win-win scenario. You receive the financial backing you need to expand your business, and the investor can reap the benefits of this growth.
“Owning a business is very stressful, and that is largely due to the fact we want to be successful. But now we have a lot more financial capital behind us that puts a lot of that stress at ease. Not only for me personally, but our employees also – we have the opportunity to grow internally and through other companies.” – Brad Hennrich, Post Transaction Benefits of a Partial Sale
Of course, with every deal structure, there are several positives and negatives compared to other options. As previously mentioned, if you find the right buyer and approach the right team to construct your deal, these strategic partnerships can be a big boost for your company.
Potential benefits include:
However, there can be drawbacks if your deal isn’t structured correctly, particularly post-acquisition. You will likely transition from being the sole decision-maker in your business to working alongside other owners. How successful this change will be depends on your personality and approach to your business – if you feel you would be uncomfortable working with others, a partial sale might not work for you.
As part of Generational Equity’s process, our advisors will have several frank conversations about your goals, preferences and requirements to help find the right buyer and setup the right structure. There are many options available to you, and we make it our aim to find the ideal one for you.
If you are one of the many entrepreneurs in need of capital to fund business growth, a partial sale might be the perfect plan of action. Why not discuss this at one of our executive conferences? These are completely complimentary, and are held regularly across North America. Here, you will not only get a comprehensive guide to the M&A process and advice on building the optimal exit strategy, but the opportunity to discuss your company goals with our experienced team.
These talks will give you a clearer idea about how to fulfil these ambitions, be it through a partial sale, a strategic partnership, a capital infusion or simply exiting your business outright. In just a few short hours, our executive conferences will give you a clearer picture of the future of your business.
Contact our team at Generational Equity today at 972-232-1121 for more information on when we are next in your area.
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
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