3 Keys to Expanding Your Company Vision

Working with successful entrepreneurs is a blast.  Yet if I step back a moment and reflect on the #1 thing that most entrepreneurs fall short – it is vision.  Entrepreneurs often need to expand their company vision. Let me explain.  When running a business, what is the focus of the CEO when he/she wakes up?  We think about what needs to be done today.  We prioritize in our mind, or on paper … these are the 5 or 10 things that we need to accomplish today. Is there any vision for the future on that list? No.  The vision for the business is typically something focused on at the early stages, and from time to time over a glass of wine.  It’s more dreaming than vision.  It’s a little like, “what do you want to be when you grow up” vision. Entrepreneurs rarely set aside serious time to think … strategize … or consider a vision for the future that hasn’t been pre-determined in the past. Example: I talked recently with a CEO who has built a nice company with a couple of retail locations.  His desire is to add a couple more offices – maybe double the business.  As …

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 …

Medway Air Ambulance – A Home Run

It’s my pleasure to announce that Medway Air Ambulance has completed a recapitalization resulting in a significant liquidity event for its owner, and a growth capital infusion by Merit Capital Partners and American Working Capital. In just over two years, we worked with Rick Moore, Medway’s CEO, to double the revenue, more than double the profitability and increase equity value by more than 5x. After the recapitalization, Rick continues to own a significant piece of the company and remains CEO. It is my personal expectation that Medway can double its revenue again over the next three years, and potentially triple over the next five years. It has been great to work with Rick and to assist him in adding the financial discipline, debt financing and to jointly create a growth vision for the company. When we first talked about a joint venture in 2012, he thought I was crazy … this would never happen. We started with a good company at the end of 2012, and over the next two years created a world class company. My congratulations to Rick for the great job he has done, and to Merit/AWC for the opportunity they have to work with Rick and …

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 …

entrepreneurial ceo

Searching For 3 Entrepreneurial CEOs in 2015

Business Owner / CEOs who want to sell some or all of their business often have a problem.  Some CEOs are savvy enough to know they have the problem — most may never know, and that lack of knowledge will result either in failure to find a buyer, or in a purchase price well below what is possible. One CEO (we will call him George) didn’t realize that he had a problem until after a failed attempt to sell his business.  We represented George as a sell side investment banking adviser.  He came to us with a buyer and our job was to advise him in the transaction.  Result?  We advised him NOT to do the deal – and he agreed. Why would we advise NOT to do a deal?  After all, our fee is based on a transaction getting done! Easy answer – the price & terms he was offered were much too low.  His business was not “ready” to be sold.  While he had a successful business, it had not grown in 5 years, fluctuating between $10-12 million in annual sales. I asked him a simple question. “George, would you like to double or triple your revenue, improve …