Is a 9 to 1 Increase in Company Valuation Acceptable?

If we could work with you to increase the value of your company by $1,000,000, would it bother you if we were paid $100,000?

And we don’t want to get paid until you get paid, so we’re not asking to get paid on some theoretical increase in value, but an increase that comes from a recapitalization or sale transaction.

In fact, if we increased your value by $10,000,000 – would you really care about the $1,000,000 we would be paid. If you’re smart, wouldn’t you want us to get paid $5,000,000?

The way we look at this is that you get 9x what we get, yet we are in a joint venture / partnership where we assist your company. If we yield zero value, we get zero. If we help you create value, we get 10% of the increase – not 10% of what your company is already worth – that’s all yours – but 10% of the increase in value.

Can we do this for anyone? No.

We need to be highly selective about the companies we work with for the simple reason that we still only have 24 hours in a day, so we can only take on one or two companies at a time. We work only with companies where we think our skill set can make a meaningful difference, where the CEO wants a partnership and is coachable. If we don’t think we can hit a home run, I’d rather pass and find the home run company.

As of March 31, we sold our latest joint venture to two private equity firms. The founder/CEO’s equity value increased over 5x in a little over two years. He is ecstatic. He received a very nice payday and still owns 20% of the business going forward. I can tell you, he wanted us to get paid more rather than less. He understood that for every $1 we were paid, he took home $9.

The founder/CEO said, “My team and I began our relationship with Jeff over two years ago.  He was instrumental in helping us formulate and execute our growth strategy while we prepared the Company for this transaction. Further, their transaction expertise was paramount throughout the entire sale process”.

We are looking for our next company – want to talk? Send me an email at