If you have any topic or guest suggestions for M&A Talk, please email them to [email protected].

How can you get on the path to entrepreneurship by acquiring an established business rather than building a start-up? Harvard Business School professors Royce Yudkoff and Rick Ruback share their insights into the nuances of search fund investing, including the challenges of finding high-quality, enduringly profitable businesses. They focus on the appeal of the lower middle market, the advantages of finding a founder nearing retirement, and the appeal of the search fund approach toward entrepreneurship.

View the complete show notes for this episode.

Additional Resources:

• Selling your business? Schedule a free consultation today.
• Download The Art of The Exit: The Complete Guide to Selling Your Business
• Download Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue
• Download Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.

If you have any topic or guest suggestions for M&A Talk, please email them to [email protected].

The auction process is standard for M&A transactions, but that doesn’t mean it’s the only way to facilitate an acquisition. Get the inside scoop on a new way of bringing companies together for the best fit. Allen Darby details how his wealth management firm matches M&A buyers and sellers by focusing on long-term cultural fit. He explains why soft factors are critical and provides valuable insights into the M&A process, helping entrepreneurs make informed decisions about their businesses’ future.

View the complete show notes for this episode.

Additional Resources:

• Selling your business? Schedule a free consultation today.
• Download The Art of The Exit: The Complete Guide to Selling Your Business
• Download Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue

View the complete show notes for this episode.

What impact can a partnership dispute have on the value of a company? What is the difference between a legal valuation and a market-based valuation for M&A purposes? Expert appraiser Andy Frew answers these questions and more as he discusses what’s involved and what can go wrong with valuations involving companies that have a partnership dispute arise. He covers the complexities of valuing partnership interests and establishing a thorough valuation methodology to prevent disputes from escalating.

• Standards of Value: An explanation of the three types of standards of value – fair market value, investment value, and fair value – and when each is used. 
• Triggers: What can cause a partnership split or a dispute and the complexities involved in valuing minority interests in privately held businesses.
• Experience: The critical role of experience and credentials for appraisers, especially when their work may be challenged in court or by regulatory bodies like the IRS.
• Differences in Valuations: The distinction between valuations for legal purposes (e.g., partnership disputes, estate taxes) versus market-based valuations for M&A transactions.

• Business Valuation Standards of Value & Fair Market Value
• Business Valuation Basics: 9 Critical Concepts to Understand
• Business Valuation Checklist: 4 Questions to Ask First
• Business Valuation Checklist: 3 Traps to Avoid

• Buy-Sell Agreements for Closely Held and Family Business Owners by Z. Christopher Mercer
• Quantifying Marketability Discounts by Z. Christopher Mercer
• Business Valuation: An Integrated Theory (Wiley Series in Finance) by Z. Christopher Mercer and Travis W. Harms
• Valuing a Business, 6th Edition: The Analysis and Appraisal of Closely Held Companies by Shannon P. Pratt and the ASA Educational Foundation
• Cost of Capital, + Website: Applications and Examples (Wiley Finance) by Shannon P. Pratt (Author), Roger J. Grabowski (Author), Richard A. Brealey (Foreword)
• 30-Second Economics by Donald Marron

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• M&A Valuations in the Real World with Abhi Mathews
• The Art and Science of Valuing a Middle-Market Business with Kevin Moyer and Megan Sartor
• What Does the Future Look Like for Middle Market Valuations? with Bill Wiersema

View the complete show notes for this episode.

The successful completion of an M&A transaction often comes down to the rapport that is built between a buyer and seller and how that impacts the ultimate deal structure. Investor Matt Bodnar offers rapport-building strategies and insights into the finer points of crafting a transaction’s structure. He talks about the variables that go into an LOI, understanding and prioritizing the seller’s objectives, goals, and desires, and how this knowledge influences the various components of the final deal structure.

• Ways to Build Rapport: Tips on how to do this through actively listening, finding common interests, and understanding a seller’s goals and pain points.
• Different Perspectives: The value in understanding the seller’s needs, desires, motivations, and objectives in order to structure a deal that works for both parties.
• Deal Structure Components: An overview of components including cash, earnouts, seller notes, and rolled equity, that can be used flexibly to bridge valuation gaps. 
• Influences on Deal Structure: Examples of what can influence deal structure and the impact of different circumstances.

• M&A Basics | The Letter of Intent
• M&A Seller Financing: A Complete Guide
• Net Working Capital (NWC) for M&A – A Complete Guide
• M&A Seller Financing: A Complete Guide

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• What Exactly is a Rollover and Why Should a Seller Care? with Trevor Crow
• The Basics of Selling a Middle Market Company with Rob Brighton
• 48 Deals in 2.5 Years – Here’s What I Learned with Jonathan Jay
• How to Avoid Mismatched Expectations with Buyers with Dan Tamkin

View the complete show notes for this episode.

The acquisition process presents a rollercoaster of emotions for all involved, and how an acquisition is announced can dramatically impact integration. Loreta Tarozaite offers insights and lessons learned from an employee’s perspective during an acquisition and integration. She discusses the importance of effective communication, transparency, employee well-being during times of change, the influence of executive communication especially during integration, and the critical need to build trust within the company.

• Trust: The importance of transparency and open communication with employees throughout an acquisition process to build trust.
• Communication: How to address employee concerns about conflicting messaging and help them understand the rationale for an acquisition.
• Integration: Strategies for integrating different company cultures after an acquisition.
• Emotions: The emotional journey employees experience and how leadership can support them.

• Informing & Retaining Employees When Selling a Business
• M&A Guide | Selling Your Business to Employees
• Alternatives to Non-Competes with Employees

Additional Resources

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• Managing Personality and Cultural Differences When Selling Your Business with Danya Shakfeh
• How Your Employees Can Impact the Value of Your Business with Marco Robert
• A Buyer’s Perspective — Why the Human Side is More Important Than Money in M&A Transactions with Austin King

View the complete show notes for this episode.

The Federal Trade Commission (FTC) has issued a new ruling (as of May 2024) regarding the enforceability of non-compete agreements. This ruling will impact every business, regardless of industry, so attorney Darshan Kulkarni joins M&A Talk to discuss the legal and economic implications of this controversial decision. He highlights how employers and attorneys can handle this situation, discusses the potential effects on employees and the legal hurdles still to come, and offers advice for business owners and sellers. 

• Enforceability: Insights into the situation since the FTC ruling is facing significant legal challenges and its long-term impact remains uncertain.
• Usability: Discussion about how non-compete clauses are commonly overused but have valid applications, particularly in M&A transactions, and reasonable restrictions may be enforceable.
• Legal Counsel: Business owners should promptly address employment agreements with legal counsel to understand compliance obligations and alternative protections.
• Implications: Thoughts on the future ramifications of this ruling in an overview of the potential legal and economic impact on business owners and employees.

• M&A Non-Compete Agreement | A Complete Guide
• Alternatives to Non-Competes with Employees
• “State Noncompete Law Tracker, Economic Innovation Group,” Map showing non-compete laws by state in the United States, June 25, 2024
• “Federal Register – Non-Compete Clause Rule,” National Archives document with a summary of the FTC non-compete ruling, May 7, 2024
• “Comparative Perspectives on Non-Compete Clauses in the United States, United Kingdom, and Singapore,” Moynihan, Nadia; American Bar Association, September 14, 2023
• “FTC Announces Rule Banning Noncompetes,” Federal Trade Commission announcement, April 23, 2024

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

Listen to Other Episodes

• How an M&A Attorney Can Help Sell Your Business with Jessica Fairchild
• A Lawyer, a Banker, and a Seller Walk Into a Bar … with Michael Frankel
• Navigating Food and Beverage Regulations for Mergers and Acquisitions with Darshan Kulkarni

View the complete show notes for this episode.

“If you build it, they will come” is an expression that applies to starting a company as well as a baseball field. Thinking about what buyers want and avoiding the pressure to sell in a specific timeframe can help you increase your company’s value when the time comes to sell. With 25 years in corporate M&A, Guillaume Thomas helps sellers understand what the M&A process looks like for buyers. He also shares how he has used these same lessons to start his own company, which has grown out of his four-generation family business. 

• Valuation: The importance of realistic valuations, the impact they have on negotiations, and why it is critical to understand the buyer’s motivations.
• Multiples: What the drivers are behind multiples and how they change. 
• Due Diligence: The critical role of financial transparency and organization throughout the due diligence process to show professionalism and build trust with the buyer.
• Entrepreneurship: Insights into the emotional challenges and rewards of transitioning from corporate executive to entrepreneur.

• Business Valuation Basics: 9 Critical Concepts to Understand
• Business Exit Plan & Strategy Checklist | A Complete Guide
• Preparing Financial Statements When Selling a Business

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• How to Build Maximum Strategic Value in Your Business with Mac Lackey
• The Emotional Rollercoaster of Buying or Selling a Business with Drew Bisping
• Financial Due Diligence – Why It’s Important to Prepare for the Sale of Your Company with Patrick O’Connell

View the complete show notes for this episode.

What is it like to source M&A deals with a focus on B2B software technology companies? Mahmoud Hmouz answers this question and many more as he discusses what a PE firm looks for when sourcing companies to consider for acquisition. He offers insights into the metrics a PE firm first looks at, gives advice for entrepreneurs on preparing for a “first date” conversation with a potential investor, and the importance of being honest about what an owner wants and mapping that to what an investor has to offer.

• Success Stories: Discussion on how this PE firm impacts the companies they have acquired with examples of some of their platform and tuck-in acquisitions.
• Enticing Numbers: Details on some of the key metrics private equity looks for in businesses, including growth, retention, and profitability.
• Good First Impression: Tips on what common mistakes sellers make in initial conversations that can waste time or damage relationships and how to avoid them.
• Growth and Evolution: The importance of experimentation, open-mindedness, and addressing inertia to continuously improve growth strategies.

• Tech & Software M&A Dynamics
• Top 5 M&A Value Drivers for Tech & Software Companies
• How to Sell an Online Business: A Case Study

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• M&A for Virtual and Augmented Reality Companies with Jeff Meisner
• The Good, The Bad & The Ugly of Growth by Acquisition with Elizabeth Cholawsky and Taylor Viens
• Case Study – Lessons Learned From Selling Multiple Tech Companies with Ryan Buckley

View the complete show notes for this episode.

Learning from your mistakes is an important life lesson. Learning from the mistakes of others is smart business. Jim Stevenson shares a high-level overview of two M&A transactions that have gone wrong and points out the lessons that can be applied to any transaction. His suggestions include going after the smart money, not just the most money, performing risk assessment and research on the buyer’s track record, running a company while managing the sale, and creating an integration plan, not just a timeline. 

• What: Lessons from two struggling transactions involving overleveraging debt, creating an integration plan rather than a timeline, and expecting too much from a cultural merger. 
• Why: Common reasons why M&A deals fail and what to look for before closing the deal.
• How: Suggestions on how to avoid potential problems or deal killers in the transaction.
• When: Lessons around the implications of deals gone wrong, managing risk, and steps to take.

• Most Common Deal Killers When Selling Your Business
• Earnouts When Selling or Buying a Business | Complete Guide
• Process for Screening Buyers When Selling a Business

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• Understanding Private Equity – A Primer for Sellers with Jeff Hooke
• Expert Advice on Avoiding Disputes Post-Closing with Bill Wiersema
• An Expert’s Views on Effective Post-Merger Integration Strategies with Ben de Haldevang

View the complete show notes for this episode.

A fairly new investment model for investing in online businesses is gaining strength and interest. Justine Cooke discusses this fractional ownership program, which is accessible online and available to retail investors. In this model, investors seek passive income through fractional ownership of online businesses, with operators receiving equity and investors receiving majority returns. Justin highlights the benefits of this model for both investors and operators, including increased exposure and investment capital. 

• Online Businesses: Hear about the differences in investing and operating online businesses.
• Investment Fund: Learn what sets an investment fund apart when it focuses on matching passive investors with operators.
• Challenges: Focus on finding operators and investors, then putting together the right team.
• Business Growth: Hear about the growing pains and opportunities that came with starting Empire Flippers and WebStreet.

• How to Sell an Online Business: A Case Study
• A Guide to Valuing Tech, Software & Online Businesses
• Top 5 M&A Value Drivers for Tech & Software Companies

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

• Preparing to Sell a Digital Company with Yury Byalik
• The Inside Scoop on Tech M&A with Barr Blanton
• Case Study – How Two College Kids Monetized Social Media and Made Millions with Harry Gestetner and Simon Pompan