M&A Advisor

Do M&A Advisors Add Value?

Billy Fink, Marketing Manager at Axial just published a great article in LinkedIn entitled “M&A Advisors Proven to Improve Valuations“. He states that advisors, 1) create competition in the sales process, 2) are more important in private transactions and 3) provide extra-valuation benefits.  And he is exactly right — a good M&A advisor should create far more value to the seller than the fee paid. This opens up another area for discussion:  What is the proper role for third-party advisors when growing & ultimately selling a business? You’ve probably met the CEO who insists that he/she can do the accounting, corporate legal reviews, raise money for the business, be the H/R director and find the right buyer for the business.  If you’ve met this person, you know that this CEO is wasting precious resources.  Even if the CEO is multi-talented, if doing the accounting is his/her best use of time, then the business has real problems. Mr. Fink’s article hits a cord with M&A advisors.  I’ve met lots of CEOs who think they will “save money” by doing it themselves.  What typically happens is that business is never sold, or if it is sold, a LOT of money has been …

Raising Equity

5 Common Mistakes to Avoid When Raising Equity

Raising capital for a business, whether it is a start-up or a mature company, can be an extraordinarily frustrating and time consuming experience. Entrepreneurs want to operate and grow their business, not raise capital. But the fact is that for most businesses, the entrepreneur or CEO is responsible for raising capital. When attempting to raise capital, CEO’s very often make some crucial mistakes. These mistakes not only can dictate whether or not the business will be able to raise capital, but also how long it will take and the ultimate cost of the capital. Using the wrong assumptions, raising capital can be impossible. We believe there are 5 common mistakes that CEO’s make when raising capital: 1. Unrealistic Expectations of Value Most of us has watched Shark Tank at least once. Just watch one episode and you will likely see this mistake. The entrepreneur goes to professional investors with a company that did $100,000 in sales last year and confidently tells the Sharks he will sell 10% of his business for $1 million. What’s the chance of this CEO getting funding? Zero. With few exceptions, investors will pay for what you have already done – not what you believe you …