Understanding the real reason WHY a buyer is willing to sit across the table from you and write you a big check is THE most important thing you can do.
Today Todd Eberhardt is on the podcast sharing with us how he boot strapped a company with his partner into a multimillion dollar company (named Comm-Works) that maintained double-digit growth for years and why/how they eventually sold to a Private Equity Firm.Todd shares his challenges with rapid growth, buying out a partner, a few failed attempts to sell the business and then how they finally chose their private equity buyer. Post closing, the story unfolded differently than Todd intended (both financially and ultimately with his role) and he is on the show to share with us everything he learned so you can better understand how to:
do as much reverse due diligence on the potential buyer as you possible can to figure out WHY they want the business and what they plan on doing with it,
align what they buyer what's with your business with what is important do you (personally and financially)
get as much money up front as you can and make sure you are comfortable with that number in case things don't go as planned post closing.
Great quote from Todd in the interview:
“People buy for their own reasons and, you know, you need to figure that out when you’re making a sale because, in my experience, as an owner and working with dozens and dozens and dozens of other owners that go through it, when you strip everything else away, there are two things that become important. Once is certainly the size of the check. The other is the legacy that you’re leaving behind.” - Todd Eberhardt
What you will learn:
Lesson’s learned from double digit growth and a sale to a private equity firm
What could happen after the sale even if you roll equity
Why companies buy for their own reasons
How to be mindful of what creates long term value
Why a growing company is a hungry animal for cash
Where to invest your cash to create a higher valuation
Why “letting go” and delegating to management fuels growth
Why thinking about taking the chips off the table in the middle of double-digit growth is a good idea
Why doing your due diligence on investment bankers is important
Why you should be happy with “the first bite at the apple” if you sell to a private equity firm
Why the average CEO on the Inc. 5000 only lasts 6 months
Questions to ask yourself, your team and any future buyer
Things to ask yourself besides “how much money do I want”
How to get a clear picture of what things are going to look like on the other side of the deal
“You don’t know whether you’re going to get the earn note or get the rolled equity cause everything changes when it’s no longer your business.” – Ryan Tansom
“Until you get good customers, everybody is trying to make contacts--make sales.” – Todd Eberhardt
“After a number of trials, we came up with a simple statement, which was, ‘Give us your worse. Give me your crappiest site.’ They sent us to these crazy places as a test.” – Todd Eberhardt
“Until you’re willing to say no to something, it’s really not a strategy, is it?” -Todd Eberhardt
Dive into your own education. This is about understanding the way the world works, why your company will be valued, why people would want to buy it, and then build your own growth plan that allows you to connect all the dots with the exact things that you want, not only for your personal legacy and your lifestyle, but also for your financial target.
Todd Eberhardt, LinkedIn
Dynasty Leadership Podcast, Apple Podcast Page
Todd Eberhardt, email: Todd@dynastylc.com
Todd Eberhardt, phone: 621-845-0276
ARKONA Boot Camp
Reach out to me if you have questions about the boot camp!
You can also reach out to me via email at firstname.lastname@example.org, on my LinkedIn, or you can call me at 612-720-6530.
Todd Eberhardt is the founder and CEO of Dynasty Leadership Consulting, which is a company that works with the CEOs of mid-size entrepreneurial companies in transition. He is also the founder and CEO of the Sonic Management group and was the co-founder of Sunset Dental Technologies, Comm-Works, TailWind Voice & Data, and was the Regional Sales Representative for Dun & Bradstreet.