Exit

The world seems full of organisations both small and large offering 'Corporate Finance' services to technology founders looking to exit their business. The problem is that the world is short of good ones and it isn't obvious which is which.

In many ways, the Corporate Finance label became an acceptable way to disguise a disparate set of individual personalities and competencies that often fell very short on the technology market/domain knowledge, understanding of business value, founder/acquirer relationship insight or overall process management discipline that adds most value from any third party involvement in funding or M&A activity.

It seemed to us that you almost 'had to' engage one of these firms to help you find funding for or exit your business; they were the people that had the little black book of people with money and buyers; they were the people that truly understood the process; they were the only people that could advise on complex deal structures if needed. The problem was that this was only ever half true.

  • Strategic buyers are often known to an exiting business founder or are active themselves in identifying potential acquisitions. This timing is the key.
  • The exit process actually starts well before a Corporate Finance person is motivated to get involved. Furthermore, the internal part of the exit process is something that is outside of the scope of the Corporate Finance remit. The process that they manage is just a fraction of the overall process that needs managing.
  • The majority of 'good' deals are actually very simple indeed and consist of a mix of non-contingent and contingent cash or shares. Any complexity is normally in earn-out, balance sheet or tax related affairs which you would be expected to address through your legal, accountant or tax advisors anyway.

In a world where software and services markets have consolidated around a handful of major acquiring entities across the globe and the internet provides a ready-made M&A knowledge base, the sell side mandate has evolved to become much more focused and dependent on 'pre-transaction' value positioning, targeted networking and grooming activities.

Capitalise have now distilled these experiences and insights into an approach to exit planning and management that is different to the traditional Corporate Finance led approach with a focus on the 4 key components that we believe maximise likely achievable value and accelerate 'time to exit', so reducing the risk of deals failing to conclude or being derailed.  

  • We help the founder, in advance of any formal transaction process, identify, plan and manage the key dimensions of their business which we know can impact realisable value.
     
  • We rapidly build a level of knowledge of the business, its market, its peer group and recent relevant M&A history so as to have deep insight into the most likely strategic buyers and allow us create the optimal positioning/approach for each.

  • We prepare the management team in advance for the most obvious and likely due diligence and warranty considerations so as to be able to enter and exit the process as quickly and smoothly as possible, allowing the founders to focus on exceeding the short term performance expectations for the business.

  • We take best contractual practices from our own exits and have template heads of terms and sale and purchase agreement wording to offer to minimise legal negotiations, time and cost in reaching mutually satisfactory terms.