How to Maximize Enterprise Value at Exit Using an M&A Advisor Instead of a Business Broker

How to Maximize Enterprise Value at Exit Using an M&A Advisor Instead of a Business Broker

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Everybody. Welcome back to another episode of the bright ideas podcast, as always I am your host Trent, dear Schmitt and I am here to help you discover, what. Is working in the world of e-commerce by shining a light on the tools the tactics, and the strategies, in use by today's most successful. E-commerce, entrepreneurs. Now. Back in episode number 292, you, heard how Kevin. Sanderson. Is helping, Amazon, sellers, to expand, their sales into, international. Markets, and today. We're. Gonna do something a little different, I'm joined, by Chris. Shipp, furling and his, partner who will introduce themselves, in just a moment for, the past 7, years they've, been focused, exclusively on, high-level, consulting for. Multi-million. Dollar omni-channel. Digital, native and Amazon based private label and reseller brands, Chris. Is especially adept at finding client. Companies that are poised for sale. Guiding. Them through the initial steps and, preparing. To make them the best possible. First. Impression, Kristin Joy's working closely with owners. Throughout. The process of selling their business getting to know them on a personal level so that they can better assist, them in realizing, their goals and we'll get to those fellows in just a moment but first would rather at first rather today's. Episode, is brought to you by my FBA, prep, are. You an Amazon seller tired. Of prepping, your products at home or the headache of running your own warehouse, my. FBA prep is a network, of commercial. Prep centers with locations, in every, region of the country for. Amazon, sellers, just like you and me they. Will save you time and money when, you ship them rather. Ship into them and you. Will be working with real people who have experience, inside. Of seller central, checkout, prep, topia their proprietary order. Tracking platform, so, you know where your inventory, is and, when, it's been sent into an amazon fulfillment center, my, FBA prep gives prep. Rather, provides, prep, logistics, and fulfillment, services for all types of e-commerce sellers, go, to my FBA, prep comm to sign up or get a custom, quote for any of your prep or for someone needs and when you do. Enter coupon code all one, word great ideas, to, save $30, off your first, month, subscription, and for, those of you who've been following me for a while you'll know that we recently or, rather, are in the process of closing our warehouse and my. FBA prep is who we are using alright. Fellas thank you very much for making some time to come and be on the show here with me they. Appreciate. It so, Chris, who's the handsome, gentleman to your right. This. Is uh I'm. Sorry what which, one this. Is one of the one, of the other three partners here at global wired advisors Jason. Summerville so I'll let him introduce himself Hey. Thank you for having us definitely, yes. Chris said I'm one of the partners here along, with Chris and and there's two others that, really. Were all founders, of, firm I'm, a I'm. An investment banker long time deal, guy I started, out with Bank, of America and that.

Actually, Ran capital markets for a hedge fund in Florida, for a number of years left. The finance, world for a little while to actually, start. And purchase, a number of companies that I ultimately sold and then, came back to finance. With. With. Our parent, firm for bid IAM advisors, and ultimately. Created, global wired advisors, with with Chris and, our other partners all. Right so. As we discussed in and, welcome Jason padding's good to have you here as Chris. And I discussed, in. Our pre-interview when. When, we first got in touch I said you know hey I just I just produced, an, episode, with mark, of. Quiet light and I said you know like why should we do another one how is this going to be any difference so I am. Now a little bit wiser as to the difference but for the audience who wasn't privy to that conversation. Either. Of you what is the difference between a, business broker which quiet light is and I'm mergers and acquisitions, or M&A, advisor, which is what you guys are, yeah. I'll start that and I'll probably toss it over to you to fill, in some blanks we. Talk about that a lot you know and you and I had that conversation on, the phone and went into a lot of depth about what that really means and you, know the the biggest difference, I would say, is you know an M&A professional, advisor spent, their careers as, Jason, just outlined, in. Capital, markets really understanding. How to take, a business how. To take a business to market that is, you, know a larger, enterprise, type. Company, working. With you know complex, entities. And. Really really understanding. Of, a, much larger difference, in how the process. Really works and so for. Instance a traditional. Business broker, will, list, your business for sale, through, a you, know series, of different listing, agencies, and will, put as as much work as they need to to get your business prepped, for sale and then, effect effectively, field calls or field interest, and pass along that interest to to the seller of the business, so, really they're just working, as a, facilitator. Or a listing. Agent versus. Someone who an M&A professional, advisor is, going to do a lot of digging. Into your company, understanding. Your business better than you and going, out and strategically. Also trying to find great matches, and great fits versus, just letting everybody come to you per se. You. Know I would say that the the process, specifically, with us is. A lot different it's going to feel and look a lot more like an investment banking process if. Goldman Sachs decided. To come down market, and take your business to. To. Market, and for sale it's, gonna look a lot like what they do but for enterprise, type. Companies, what. Else would you fill in Jason as far as the differences well I think I think the words strategic, it comes to mind I think as being a real driver. You. Know when when we look at the, opportunity, to help a client reach, their strategic goals, through exiting, business, ultimately. Selling that asset, there's, you. Know as Chris sort of described, what I'll call a rather quick, process, fairly, limited you, know just kind of listed, as though you would list a home for sale you know kind of very similar type of approach, whereas, we're, gonna take a much more strategic, view. Which. Requires, understanding. The business at, a much. Level, it, requires thinking. Through. You. Know the right type, of fit, and. Specifically. Seeking, out that.

Type Of potential. Acquirer so it's very proactive. I'd say as well. Go. Ahead so, I really like to dumb things down so I'm. Gonna I'm gonna do that if I may my. Understanding, of what you guys do is there's two types of buyers in the marketplace there's a financial buyer and there's a strategic, buyer a financial. Buyer is someone who's looking at that business and, I think maybe a lot of first-time buyers might be a financial buyer they're looking at the business of looking at the cash flow and they're thinking hey is this our is the return. On investment gonna, meet my goals and a. Broker is probably very good at finding a financial buyer a strategic. Buyer on the other hand there's a whole lot more to the, acquisition than, just. What. They're gonna the impact on the financial statements so if I'm understanding what, you're explaining right if I, want to find a strategic, buyer for, my company, like for example at some point in time I'll sell my software company flostor, and maybe, I would get a lot more money for that company if I could find just, the right strategic. Buyer that by bolting my business, and what I built into their business one, in one now equals four instead of one and one equaling maybe three have I got it right, yeah. I would say close the only difference, I would I would throw out there was maybe a little difference, in vocabulary okay, so when. We say financial. Buyer what. We typically mean our firms, like private, equity firms and firms, family. Offices, you know larger. Really. Entities, that were created, solely to effectively. Manage a pool of capital oh i'm, acquire. Different. You know and different, companies in order to achieve a return on that capital so. I would actually put. Those, types, of financial buyers more. In the category, of what you described, as a strategic. Buyer i wouldn't, put those really. Together and, then, what, i would say below that is. I'm going to use a hierarchy. Approach. Below. That are what I would call either, individual. Buyers or loosely. Formed pools, of capital buyers. Or like, I said just, operators. Which, are a little bit a little bit different, and typically. Synonymous. With, smaller. Transactions. Let's say transactions. That are under. Five million dollars, that tends to be synonymous there. And. So, those, individual. Kind, of buyers as, well as those loosely, formed pools of capital search. Funds, another. Name. That we we give those sometimes. Sometimes. Those, are a. Little. More transactional. In terms, of the approach it's. A little more pay I only. Pay a certain multiple, I'm only looking for a certain price and I'm. Really not going to think about this very strategically. I'm really gonna think about this soleus, I've decided, that, I'm. Looking, for a business that looks like X the, most I'm willing to pay is y and I'm, just gonna go out there and I'm gonna look at hundreds. And hundreds, of businesses, until I run across one that meets those, fairly, narrow standards. It. Does, so. Another, follow-on, question, to that let's say, that. I am, a fellow that I interviewed, on my show a couple. Episodes ago. Runs. Elements brands his name is Bill and so. Bill has been making individual, acquisitions. And building, a portfolio of, these. Companies at some point in time if. Bill so, he's been buying through brokerage for the most part but. At some point in time if he wanted to sell his entire business which is now a portfolio. Of brands I'm, assuming he'd be. Probably. Much better off to deal with an M&A adviser on the exit, than a broker. You're. Correct and I actually I don't know if you know we know Bill yeah, I suspect, you probably did Bill the Charlotte, guy so. It's. A small world here even though it's not a terribly, small city yeah, we know we know elements, very well and. Let, me let me tell you a bit of a secret. About. About. Well, not it's really not about them it's really about, a lot. Of buyers in mark. One. Of the reasons that we didn't really describe, why, we decided, to create our, firm, and create. Our mission is that, we felt like. Owners. Of businesses. That, are, we, use we use fifty million dollars, as kind of a rough enterprise. Value line, owners. Of businesses were everywhere, from zero to. Fifty million dollars, have, historically, been very underserved, in terms. Of their intermediary. Services. That are available in the market by primarily, business processes. Right and so, one, of the byproducts. Of the, market, that, this. Kind of smaller company, market, being buried we'll, call it heavy in the business broker type intermediary. Is that. Companies. Sell cheap. They. Sell for really, less, than what they're really worth that's. What bill tells me absolutely. So. If you're bill. What, you're gonna look for is companies.

That Are under priced now this. Is something else I'll tell you about Bill. As you know Bill's a very smart guy he understands, you, know the big picture, he's. Not just gonna go and, purchase any company. That's underpriced he's. Gonna go buy a company, that he thinks is the right fit for what they do it's. The right you know kind of fit for a bigger picture where, they're trying to go and. You. Know granted, he'd, rather pay them he'd always rather, pay less for it but. It's up to guys like us to. Get him to pay more and to. Get in the way we do that is by doing the, work to. Show him, and others like him how. This really fits, in terms of their. Kind of their mission, their goal their portfolio, and why, it, would be worth to. Them what. We are asking. Them to pay. Okay. So. All, of, this sounds very big. Business and Wall Street and for my audience I want to make sure that the that, this interview remains relevant. As well interesting, so, what's, the minimum size of a company, that your firm would normally, would would work, with. Yeah. We, typically. Our threshold, is about a million, in enterprise, value you. Know our sweet spot is five, to, twenty five and enterprise, value typically, what we find just to dumb it down, what, we find is that while. We take a multiple, of cash flow or seller, discretionary, earnings or adjusted. EBIT da we. Find that the valuation just, depending, on the, depth depending on the type of business obviously SAS, as you know is much different but depending, on the type of category, consumer, products company the enterprise value tends to kind of live around where, the. Revenue, sits, a little, bit higher a little bit lower now. What we have discovered is that our sweet spot we knew this going in our, sweet spots really that five to twenty five-plus. Enterprise. Value we do really well because we're able to then take, your. Company. To. A much different, type of buyer of a much different, type of cool and we, and we do a really good job of explaining as just just what Jason said to, that buyer network. Of sophisticated. Capital, this, is why this fits, this is why this is a really good company and here's how here's, how this is going to grow and here's what you can potentially do with it we're really good at that so so.

What Impact is that going to have on the, valuation, multiple, versus. Going down the business broker road and getting two point eight to three point two or three point five whatever a. Lot. You know and Jason can fill in these blanks because, he's one of our deal runner partners. But you. Know again, when you're in that under, a million even, a million to three million. It can, tend to be a little, difficult, to get that. Buyer network and that buyer are pulled to understand, as Jason, described, the value, of the business going, forward you, know as you as you get up and you start to talk to sophisticated, capital, you, know they're there they're okay. Paying, a larger, multiples, as long as it fits criteria, and they understand, the long term strategy, now let you fill in the blanks on that yeah. I think the short. There is, there's. A lot of variables that will ultimately affect it but if we just take size as being let's say one of the primary ones, the. Larger, the deal the, more impactful. The process, how. It's so. If, you're talking about on a million dollar deal you. Know there's, there's a there's one, we just closed that was million, and a half and. That. Actually, business was taken, out to. Market, a year, and a half or so ago. It. Was a little smaller then, but. It was also run through a traditional broker. Process, and, and, bids came in they were all around you. Know to seven, to eight times, cash flow and. We. Just closed it at close to four, mm-hm. And so. That's, an example of kind of a little bit on the smaller end of what we would typically work for work. With, upwards. Of as soon as you start getting over, that. Eight to ten million dollar number, that's. When you, can start stretching, into what. I'll call the. Low end of private, equity multiples. Which, right now private. Equity average multiples, are you know in kind of eight, plus. Range. Cash. Flow you, can start stretching in and getting closer that six seven. Or, so you, know time so give you another example we, closed a deal a couple months ago that had about, a million dollars of cash flow and we closed it at a seven and a half month. And. To give to give some color to that a friend of mine a, business. Friend of mine from Vancouver my hometown, his. Name is Charles Chang and these days he runs a company called lyric growth, he, sold his, startup. For about five hundred million so, he was pretty well capitalized, after that as you might imagine and he, started lira growth and he starts to he's been acquiring. Direct. Consumer, brands, and, when. I was early, on after my interview with Bill I called Charles, because, I had a hard look at well you know maybe I should be building a portfolio as, well and ultimately decided, I'd rather build a software company but. You. Know when I was explaining. - Charles, what, I could buy these businesses. For he was like. At 3 - 3 X he was floored, he said train, he says when I find, a company, you know doing five six seven million year and it ticks the tick boxes, that. I think it can get to a hundred million he. Says I'll pay two three to five X for revenue, for. That company so, he says if you're buying them if you buy the right companies. You're. Gonna make 10 X just flipping it to me assuming, that it ticks all the tick boxes and I and he thinks it could get to 100 million dollar company which is not every company obviously, right. So. You, know as you stretch upward, the. The process, tends to be more, and more impactful. The distance between let's. Say a broker, process, and something a little more, robust, like, we we. Do the. Delta. Starts getting larger, that's right. So. How. Does your background, as an image M&A, adviser, generally. Differ from. That, of a business broker and, for. People. Who are running say, a sub 3 million dollar business. Why should they care about that. Yeah. Well I think you, know typically. An M&A adviser and that's the that's the case with our firm. We'll have had you know a number of years of what, we would call real, Wall Street level, experience. Working. With either, a large, investment bank or a large, middle-market. Bank. So. You know a large investment bank for example I started my career with Bank of America so. All the clients, we worked with were fortune 500, clients all, the transactions. That we did we're, typically a billion, dollars or higher.

Basically. The same. Effectively. Size, deals, when I moved on and ran capital markets, for the. Hedge funded in Miami. Usually. They're gonna have kind. Of a great. Foundation. That, is, you know has been built in large, deal-making large. Complex. Transactions. And, what that does is that actually. Allows you to bring a level of sophistication. Knowledge. Crea, activity, etc. To. Any deal, process, whether that you, know two million dollars or two billion dollars, ironically. A lot of, the, parts. Of the transaction, are very much the same and the, other thing about you, know about running running, deals is kind of what we use the, phrase, we use whenever. You're in kind, of the merger, and acquisition, business. Every. Transaction, has, bumps, in the road and they're, always gonna, and. There's always many bumps in the road that's, cuz there's people involved that's, right people of the prop humanity, is always, the outsider that's right yeah so, if you have a lot of experience, navigating. Very, complex. Very high stakes bumps, in the road then. That, that arms you with. A great, toolbox. Should. You come you know up against, bumps. In the road in, this part of the market is right it's really it's. A level of, again. Sophistication. Complexity. As well. As against. Let's call them high stakes billions, and billions of dollars at stake for, you know whether the deal closes or doesn't close it, kind of creates. And, and really hones your skills as a professional. Deal. Maker. That. You that we bring to, bear on on, transactions. That. You know with all our clients and when we started our firm that, was really the exact kind. Of alluded to this earlier our mission, was let's. Let's, take all of this great training, that, we have and all, of this great experience, and let's bring it to bear on, a part, of the market that we feel is underserved, that's right and so that was that was really the the reason why we decided to do, this and I would add to that real quick you know we're, all stakeholders. In this firm and that's also a big difference we're not 1099, guys right, so we're all stakeholders.

You've Got four partners as a support staff you. Know you don't just have one person working on your deal you have an entire team working on your deal and that, brings a lot of it, just brings a lot of knowledge. You, know strategic. Thinking really more creative, thinking you know because again when, you've got where every deal needs some problem-solving, every, single one and I, can't tell you how many times we've sat around in our partners meetings and we've discussed how we're going to approach everything everybody, is involved in every deal and so. You just get it you get you get a lot of experience. You get a lot of teamwork, involved. In running your deal I would say that's a huge difference between an M&A, adviser and a an, M&A advisory team and then also a broker. So. This all sounds very expensive. How, do your fees compare, to, that of my broker. I'd, say it's very similar on the on the success fees almost parody you, know we depending, on the type of transaction, we, may or may not charge, a small upfront fee and we, only do that for a couple reasons, you. Know when you're working with larger, enterprise, companies, or larger, businesses, even in lower middle market you know paying consultancy. Fees is is not a problem you know they don't have that smaller. Businesses, tend to have an issue because obviously they tend to be more cash constrained, but, again we work with everybody it's all a case-by-case basis. And you, know we don't do the middle market thing right so in middle market investment, banks they will charge you know a very, large upfront fee and a smaller success, fee lion. Share of where we're going to make our money is when you're gonna make your money mm-hmm, so that's really where it's Perry so we may have come across as we sound very expensive, and yes we get we are premium, there's no doubt about that and we believe, there's reason to be, premium because we extrapolate, more. Value, and we know that we're indexing higher multiples, because, in the end you make more money but. At the same time no, one has ever complained, about us being Wall, Street or even just expensive, period. So. After my conversation, with Bill. I. Considered. Selling. One of my companies and I also started to have a look at what. Was available in the marketplace to buy and, a. Couple of things, stood. Out so first, off on the buy side, most. Of the deal books put together by, small, independent brokers around the u.s. are absolutely horrible amateur. Hour extraordinaire. And then. When. I looked at because, I knew some folks at quite. Light I went through the process with them and and got, very very close to listing one of my companies and I have to say that their process was extraordinarily. Detailed. And, thorough, and. Really. Came together with a hell of a deal book, vastly. Superior to, anything that I saw so let's let's. Put quiet light because. I have an affinity for them but I'm not being paid to say this but at the very top of the broker pile in the world that I live in, from. Your perspective. And you can compare yourselves, to the average broker to quite light or whatever way you'd like to answer the question but how does the process. Differ. With. Working with you guys to, get my my business, sold versus. Either, you, know average, broker Bob or maybe. Premium, broker quiet light sure. Sure. Well I mean we can start with the book since, you can kind of mention that, and. We. Agree with you we think that the marketing, materials, that are traditionally, produced in the broker world are pretty, terrible. Honestly. And there's really no reason to even produce what what typically it gets produced it actually I think it does more armed than good it's usually that bad but. You. Know and and as much as you. Know you like. Quiet light we would certainly very much put them in that broker, category, I think that you, know what you're gonna find in, a typical even, let's say a premium, broker, book, is it gonna have a fairly, brief description. Of some different key parts of the business a lot of times you'll have an interview. Questionnaire. Where, really the seller, is, kind, of selling, you know kind of really creating, their own book by. Just simply answering, question. Which. Is fine I think that at the end of the day a seller, when, is going to end up speaking to buyers at some point they're. Gonna have to answer a lot of those questions at some point but we, take a much. Different. View on the, marketing materials, first of all again you got to consider our backgrounds, we're marketing.

Materials, That are, typically produced for large, actions, their lengthy, their, robust, there, they look, good, they're, structured, with a real, kind of thought in mind of I'm. Gonna take a pencil. Counterparty. Potential, buyer on a journey, through this book, so. You got to think about how, does it layout you, want it to almost be, well, you do want it to be strategic, in terms of the reading about this information, first in this information, second, and this information third, and it's, not just created, that order, wasn't created, Hazard, Lee it was done for a reason right because. We, wanted to effectively, tell a story, and at the very end when you close the book the, moral of the story is you, should buy this company right now, that's. How that's. How we design. Them and approach them now as far as our. Books are typically, anywhere, from forty to eighty pages. You. Know very, heavily. Graphically. Designed there's, a lot, of you, know numerical. As well as prose, information. There we spend a lot of time digging into, opportunities. For growth, as. Well as describing. The the nuts and bolts of the company action so let me interrupt there if I make Jason. The opportunities, for growth yeah. So. In. My limited. Experience. In. Working with quietly. They. Predominantly asked, me where, I thought the opportunities, for growth were in the. Deal books if you'll call them that that I looked at from other we're, much more amateur brokers, there was you, know limited to no word. Smithing more copy, or whatever available to. Explain that when, you're working with one of your clients are you are, you relying on them to feed, to you where the opportunities, for growth are is that when you're really leaning on your background and your research skills and so forth. I'll. Start and then I'll let Chris jump in because there's a big part of that that Chris actually, personally, runs for our firm so. The short answer to your question, is is but. First of all we obviously want, a tremendous, amount of input, and an opinion, from, the client, they know the business very well they. Have a lot of very, you, know most of our clients, have a lot of very specific ideas, around. Ways you could grow the company that, usually is kind of where we would start. Normally. I'd, say it's, probably. 30%. Maybe 40% from. The client, and the. Rest would be from our activities now there's. Two, key. Parts to, you know us kind of driving, growth. Opportunity. Discovery. First. Would be especially. For, digitally, native businesses, which is really become what we're talking about here with global wired we're. Gonna do a, lot, of technical, diagnostic. Work. On the business I'll, let Chris go into that in more detail because he runs that part of of. Our firm and that diagnostic, kind. Of getting under the hood and, digging, into the nuts and bolts the end, result. Of that process is, really. Opportunities. From. A tactical perspective. To. Grow the business it's very tactical, and very technical, in, terms of that part of the opportunity. Analysis. Yeah. I would say you know, one, of one of one of other parts of our process, before we take up a business, to market is. As. Jason said you know we're, gonna take all the input of what they've told us and what we've discovered and what we learned and once we get under the hood we're. Having eyeballs, that are highly experienced. In both Amazon, or digital marketing, we, have some, creative resources, as well branding, resources, we, deploy a lot of resources to, effectively, create a three-year business plan for this company because. If you're gonna get someone to believe what's, happening, it's best, to look at the windshield than, the rear view right, and so, you got to get them to bite on where. Is this company going and you want them to also pay for growth effectively. In, order to achieve that you've, got to do a lot of legwork to really understand, the business and, oh by the way if, someone's. Calling that is you know whether a whole range whether that's personal, capital or a very, large private equity group they're, gonna start, m-16. A bunch of questions, your way you, want to be able to answer very intelligently, without, always have any default to the seller and. So that's part of our process - which is really understood when I when I mentioned earlier understanding the business better than the owner that's, part of what I met it which, is really taking, a three year business plan applying, it to you, know a, financial. Plan a marketing plan a sales, plan and effectively. It's kind of like taking the the yang and applying the yang right. It's like okay you got this but you got a real I need you to really focus, here, because. That's where the business is headed so, we, look at we look at the business holistically. We look at every single facet whether, they're omni-channel and, they're selling in wholesale you know we understand wholesale, very very well we, also understand.

Digital Marketing extremely, well we understand Amazon very well - eBay. Walmart, etc, they're a bit more I call, them stationary Amazon. Got more of all of the moving parts because, you have a lot more control they're, digital, marketing you have all the control because it's run through your website etc so, that's. A that's a good glimpse into our our, book, in our process, we're, really talking about opportunity, and, the last thing I'll add there you. Know just, so I don't want to go on and on on the topic but I think it's important, you know, when we're marketing. A company, for, for. Sale, our. Job, is to you. Know sell the company market, the company do the legwork while the client continues, to focus on running, the company and operating, the business so what we don't want and what we don't do is have, everyone. Who shows interest, in the business get on the phone with our client that's. Another very key, difference, between what we do and what a typical broker, will do because, they don't spend the time to, really understand, the business they can't answer most questions certainly. Not intelligently. And so, they default, to anyone. Who shows any real interest hey, let's get you know let's get the client on the phone let him do all the work and what. Happens, is we hear this complaint over, and over again from people that have worked with brokers, they're, like I spent, all my time on the phone with, anybody. Who showed the least amount of interest big time sorry no all of my all my time is spent on the phone and my business starts to suffer that's right so I think that's another thing where. When we talk about kind, of a premium, sort of process. In service we're, only gonna get you involved, if you're the client owner if, we, have spent a lot of time, already. With, this potential, buyer and it's truly, the, appropriate. Time to now get, them and yell, on the phone or. Potentially. Even in person, with. The client, it's. Very, important, that. That. That's the way it goes in our view that will otherwise they're, just they're doing the clients doing our job for us and, that's not why they're paying us, so. How would you describe the differences, between your. Network of buyers and, business, brokers network of buyers, it's. A great question sure, I'll start I mean typically, a business broker is, going to have. A list of people that, have. Really. Kind, of proactively. Worked with them in the past so they've. Either got. You know a link on their website or a fill inbox on their website where they say if you're interested in buying a business and give us your email address or. They've. Shown interest in previous, deals, that sort of thing. That. And that's pretty much it as far as a business. Broker. They're, just gonna blast out any. Deal to that list, and, hope, they. That. A few of them become, interested, I think, our our network, is really that. Plus. A whole lot more the. Plus a whole lot more comes, in to the proactive. And strategic. Approach so not only have we worked. With, you. Know literally. Tens, of thousands. Of counterparties. We. Also, will. Reach out to counterparties. We've, never worked with before. Proactively. If we. Believe that they're a strong, fit for, a deal, and you say well how do you know well. It comes to two two quick easy reasons, number one good. Old-fashioned. Research and, number. Two. Having. The ability to recognize. A potential, fit when you see it and that, from experience, so let's, say that we. Have a new client that, happened to be in a certain industry and let's, say that we have some. Counterparties. That we've worked with in that industry before but. No not all of them. We're. Gonna I mean as part of every deal in preparing. For marketing, we engage in a lot of research to go and identify all, that whether it's financial, as we kind of got into before or, strategic, that, would be a good fit for the deal and, we're gonna target them very. Very. Intentionally. When, we start, the market that's, right and I would I would just couple that with you know we. Even have. Several. Deals that you know don't even go they don't go none of our deals go on our website.

And. We have several deals that don't go to any listing, websites. Either we. Just know that there's just not a good fit there but we know that this deal in particular, because, of its industry because because of its size because. We understand, who it needs to get in front of we, know exactly who to market it to we know the type of buyers. That would bite at this particular, deal we, actually have we have a fairly large SAS. Company, that. Is going to market this week and you, won't see it anywhere unless, you are a strategic private, equity or, you. Know strategic SAS company looking for a rollup. Conant. So, when you say large SAS company these days cuz so many of them are new what's the ARR without, you know have to name their name just curious. Oh it's, on my head I cannot I cannot remember, so I did all the diagnostic work when I got out you know this was about four or five weeks ago so I, get, back to you on that but, they're you know it's typical SAS. Everything's. Just hockey, sticking right everything's, growing like a weed and for, my own curiosity, what. Multiple, in revenue or SAS companies being sold for these days just to, strategic, buyers. Well. We and, that, was a lot a lot of our research phase, that we did actually. Starting, earlier this year. But. I think I think middle of the road median, is like four, or five I believe that's. It isn't it really hot, ones are getting about six or seven a revenue, well, and certainly, the larger as you get up to something, kind of really larger it's gonna go it's gonna go much yeah yeah, and, I looked up the we've, been considering raising money at some point in the next maybe, four or five months for my SAS and just, out of sheer curiosity because, I've been funding it out of cash flow so far she'll. Share out of sheer curiosity I, googled, SAS. Investor. Evaluation. Some some kind of phrase I forget exactly what it was to see and. I was amazed for companies that are in the seed phase which is 0, to 200, grand of ARR which is where we're at, the. Evaluation. Range pre money was four to eleven million. Just. Crazy. Yeah well. The other thing too and and I we can do a whole podcast on on this another. Time but a. Valuation. In a, growth, or funding, round is very different, in the evaluation, in a buyout, oh I'm. Sure I would imagine that the funding round well, from what I've seen and what you're saying the valuation, the funder ground which strikes me as backwards seems higher than. The valuation in the exit round well it depends on where you are in, the site so like the early stage, you are actually. Comparatively. The funding round oftentimes. Looks like a much higher, valuation. Compared, to what's. Your revenue so, what, happens is you can't look at it purely as a multiple, of revenue, apples. To apples. For. A funding, round especially in early a seed or a series a type round to, a full actual, buyout. The best way to compare, a lot of times people compare, those two things as though they're apples to apples and they're a little bit and. One. Other totally, self-serving, question but maybe it will also assist, other than one anyone else who's listening I'm, actually not interested in traditional venture capital, for, my business for a whole host of reasons I, just, don't want sharks swimming, around on my own swimming pool and, one. Of the fellows I interviewed on my SAS podcast. Had raised five million from family offices, and he's very very happy with the terms that he received is your, organization, at all assisting. Companies. Like me who are looking to raise money from family offices. We. Are we, absolutely do so we do we new growth rounds, with, you series a round. We do all of that now I would say the majority of, our deal, activity, is biotics okay, we're about 20, 15 20 percent would, be in a raise but, we're, closing a 30. Million dollar raise next week a series act though, it's, not pretty sad company but we'll, talk about that more off-camera, then yeah. All, right guys well thank you so much for coming and being on the show for folks who want to know more information about your firm it'll, be in the show notes but if somebody's listening and they just can't wait what's.

The URL of the company website yep. So it's a global, wired, advisors calm or if you for most of your audience go to Google and. Just type in global wired advisors, will pop up and for the four percent who use Bing they can do the same thing I. Can't. Believe that people still. Use Bing like how do I react I think you just buy a Chromebook, and it comes with it so by default you've got a lot of maybe. Maybe geriatric. Users that are using him know, how to. Make. Sense all. Right gentlemen thank you so much for being on the show thank. You thank you.

2019-12-13 05:18

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