The Exit Stage
For any company, the exit process is an exhilarating and scary time fraught with unknowns. Look, the mere fact that a you’re considering an exit means that you’ve grown your company from an idea into a thriving business worthy of acquisition.
Congratulations! You know how to make your product or service and you know how to sell it. But most companies don’t know how to sell themselves. It is an entirely different set of challenges. To compound matters, it often serves as a distraction, pulling the time and attention of senior resources from doing what got you here in the first place – running your business. Too often the exit stage becomes such a distraction that companies stumble during the final stretch resulting in subpar valuations or worse, missed exit opportunities.
In some ways – this is the most important time of your company’s growth. It is a time when the years of blood, sweat and tears you’ve put into growing your company all pays off. When it all results in a valuation and a deal that reflects the sum total of your efforts. It is absolutely critical to have an experienced partner during this time. That’s where we come in.
The Maroon Approach
The Maroon Approach is unique. Unlike business brokers or other advisory firms, we partner with our clients throughout the entire exit process. We bring our experience, network and skills to act as your partner as you negotiate this process.
On its face, the goal of any exit is simple:
- Find the right buyer,
- At the best possible valuation,
- With the most favorable deal terms,
- That maximizes shareholder return.
The challenge is getting there and that requires concerted efforts in all three phases of the exit.
Phase 1: Preparation
Most companies going through an exit never really engage in a preparation phase. This results in subpar valuations, lost opportunities and overall deal drag. The preparation phase is critical to a successful exit because once the discussions with an acquirer start taking place, the fundamentals by which your company will be valued area already in place and all that remains is the negotiation.
A truly unique aspect of the Maroon Approach is that we partner with our clients three to six months before marketing commences to adequately prepare for acquisition. A fundamental truth is that what works for a company during growth is often not reflected in an acquirer’s valuation. This is especially true when it comes to how growth companies manage their financials – trending more towards reinvestment of profits for growth rather than showing substantial EBITDA.
During the preparation phase, Maroon will perform a deep dive on your company and make specific recommendations to reconfigure it for exit. The primary goals of this stage are 1) maximize valuation and 2) eliminate or reduce issues that cause deal drag. Such activities include:
- Overall due diligence review
- Review of company financials
- Adjustment in business operations to increase key measures of valuation
- Review of company organizational documents to remove deal impediments
- Cap table review and clean up
- Review and preparation of management team
- Review of all critical vendor/client/customer relationships and contracts
- Inspection and identification of key intellectual property assets
- Formulation of probable valuation expectations
A properly prepared company will command higher valuations, more acquirer interest and experience less deal drag.
Phase 2: Marketing
Marketing, messaging and targeted outreach are key to a successful exit. Maroon will work side-by-side with your internal marketing efforts to bring your company to market. We’ll craft the message, identify target acquirers and market your company to them. Another unique aspect of the Maroon Approach is that we leverage extremely targeted advertising and marketing campaigns to “seed the clouds” by reaching out to target acquirers to raise the general awareness of your company long before any direct contact is made. Marketing activities include:
Conduct working sessions to build detailed, comprehensive acquirer personas as a basis for building a target list of acquirers
- Review your branding
- Adjusts your brand charter with more specific messages designed for potential acquisition partners
- Formulate a target list that be diverse, with companies in several industries
- Create marketing messages that will trigger a response
- Employ passive marketing campaigns for acquirers through highly targeted advertising campaigns
- Conducting initial meetings and pitches with target acquirers
Like any sales process, the goal of the marketing phase is to turn prospects into leads ultimately resulting in negotiations for acquisition.
Phase 3: Negotiations
In the Maroon Approach, negotiations commence with the first meeting with a target acquirer. Unlike traditional business brokers, we act as your company’s representative throughout the entire negotiation process. This allows us to use multiple negotiation tactics to drive higher valuations and increase the overall deal speed. We know the process. We know the tactics. The negotiation phase can be exhausting and frustrating. With the Maroon Approach, we shield senior management from having to deal with many of the process details such as complying with due diligence requests and coordinating activities with legal representation.
A deal isn’t a deal until the ink has dried on the agreement. A backup plan is critical in maximizing negotiation leverage. Thus, another unique aspect of the Maroon Approach is that we’ll continue to market your company until the deal is done.
Let’s be Frank
We know what it is like to be a founder. We’ve founded companies and negotiated successful exists. Let’s be frank – your exit is one of the most important moments in your professional life. It is the moment when all your hard work pays off. You’ve dedicated years of your life for this. Why would you do this alone? Why wouldn’t you partner with a firm that has the experience and the track record to help you achieve the highest possible return?
If you’re serious about pursuing an exit, contact Maroon today for a free consultation.
Maroon Ventures is a different kind of advisory firm. We don’t just trade time for money.
Maroon is dedicated to working with committed companies to do great things. People ask us all the time, who are our ventures? The truth is, you are our ventures. Every single Maroon client is a venture of ours. We treat you like family and are dedicated to your success.