Armando (0:00 – 0:23)
Hello, founder. You’ve built a successful business and now it’s time to think about that once-in-a-lifetime exit from your business. You’ve come to the right place.
Here, you will hear business exit professionals involved in the buying and selling of companies talk about what you should know before you exit. If you’ve never sold a business before, this podcast is for you. I’m here in Scottsdale, Arizona.
Lena, how are you?
Lena (0:23 – 0:25)
I’m great. Thank you.
Armando (0:25 – 0:26)
Good, good.
Lena (0:26 – 0:28)
For letting me join you today.
Armando (0:28 – 1:20)
Lena, I’m excited to have this conversation with you because there are so many companies here in Arizona that have grown up, built just fantastic companies. And the people who started those companies are getting a little bit older and they realized that at some point, they just have to step out of that company. And if they’ve never gone through a sale before, they don’t know what an investment banker is.
They don’t know, maybe don’t know you, and they don’t know what really should do. They just don’t know what they don’t know. So, what I’d like you to do, if you could, is just speak to that business owner who’s thinking and realizing that at some point, they do need to step out and somehow exit that company, sell it, whatever they wanted, but they somehow will have to do that.
And just introduce yourself, if you don’t mind, and then just talk about how you can help them navigate that whole transition.
Lena (1:21 – 2:36)
Well, wow, right? Well, one, I’m joking because you make my job really easy, right? What I need you to do is to walk into these introductions and just repeat those words, and then we can come and clean up, be the cleanup batter, so to speak.
But thank you for the introduction. So yeah, my name is Lena Dalby, my firm is Link Capital. And we are what we call middle market investment bankers.
That means we tend to help closely held companies, generally in Arizona, but we do work now, thanks to Zoom, outside of Arizona, but we tend to help closely held companies, what we call maximize enterprise value. And maximizing enterprise value, right, can sometimes be in the context of a sale. And most companies think about, you know, a sale being an exit in the entirety, that’s not always the case, right?
Sometimes businesses, you know, exit in less than the majority. But also times we can help a company grow, right, through some kind of strategic capital event or strategic capital raise. So, you know, we start by listening, right, and understanding what a company and an ownership group, shareholder group wants to achieve, and then talk about whether our firm can provide, you know, those solutions, as it relates to achieving objectives.
[Speaker 5] (2:37 – 2:37)
Okay.
Lena (2:37 – 4:42)
You’re right in that the majority of our work is what’s called M&A, mergers and acquisitions. You know, I’ll add to that, that most of our, we are industry agnostic, right? It means we touch lots of different industries that can range from business services, healthcare services, manufacturing, branded consumer, industrial companies.
So the first question, right, we usually get is, do you know my industry? What do you know about my industry? And so we can talk a little bit more in depth and later about, you know, what is it?
Does it matter, right? What impact does an industry have? And is industry expertise, something that you would look for in a business banker or broker?
And, and then the range of transactions we tend to work on is, you know, 10 million up to 200 million. So that’s considered a middle market here. So that’s a little bit of a helpful backdrop.
But I guess lastly, I’ll say we tend to represent companies in what I call their first institutional deal, right? Typically working with either family owned companies, right? Where a company may be owned within a family and that can involve husbands, wives, other family members, and oftentimes offspring, multiple offspring in the business, you know, or simply closely held companies that could be held singularly or in a partnership format, but it’s closely held and doesn’t have a lot of outside shareholders.
So we tend to work with those types of companies and then representing them in what I call the first institutional deal where the party on the other side, right, is either a larger strategic firm or a private equity firm. You’ll also hear us refer to that as a financial buyer, financial sponsor, but we use the term private equity firm and financial sponsor as synonyms. We tend to help them do that first institutional deal with the first time that they’re working with someone outside of, you know, their family or their existing shareholder base.
Armando (4:43 – 5:01)
Okay. Okay. And let me see if I can, if I can just kind of paraphrase that a little bit.
So the, the family owned business here that maybe has been here 20, 25, 30, 40 years, and they’ve, they’ve grown into a really nice company. And like you said, 10 million to 200 million, that’s in revenue growth sales.
Lena (5:02 – 5:19)
You know, I’m talking value, right? I think about the value of the company, right? So I’m in the 10 to 200 million tends to be the value, right?
So what the company’s revenues and cashflow might look like, right. Their value is predicated on a lot of factors.
Armando (5:20 – 6:17)
If they were to just have a sale, the sales price would fall somewhere between 10 million and 200 million. Typically that’s what you’re working with. And so these, these, these business owners here who, who just grown a really great company and really hit the American dream with their, through their hard work and that, and they realize it’s time for them to, they’re going to have to step out of that company somehow, some way, either sell to a younger partner or sell to a competitor or sell to an adult child who may be being groomed to take over the company, sell to a partner or sell to a big company like Walmart or, you know, whatever. Like you said, when you said that they’re, this is their first institutional transaction.
What you’re, what you’re saying is that they might have a company here in, in Arizona where say $50 million in the company that buys them might be worth a billion dollars or some just big astronomical number that is in all the States or maybe all over the world.
Lena (6:18 – 6:51)
So what I’m, what’s going through my mind as I’m listening to you is I find myself saying, let’s take a step back, recognize that the word sale, right? That in and of itself oftentimes can be a scary term, right? That says it, you know, it, it creates uncertainty or fear or deflection or someday or down the road.
So I’m sensitive to, and I’ve learned, we try not to even use the word sale, right? Because oftentimes we call it a transition, right? We want to transition the business.
[Speaker 3] (6:52 – 6:52)
Okay.
Lena (6:52 – 7:04)
Or my favorite euphemism for sale is sourcing a capital partner for growth, right? We’re going to source the capital partner for growth. We’re not selling anything.
Armando (7:04 – 7:08)
Okay. So the company itself, you’re thinking of the company itself.
Lena (7:12 – 10:05)
And I’ll reinforce that when for many of the companies that we have sold, if you will, and most of the press releases you see today, right? You generally don’t see company XYZ sold to company ABC, right? You tend to say company XYZ partnered with so-and-so for growth, right?
It’s a softer landing instead of saying, Hey, we exited, you know, we’re out of here. We got a bunch of money, right? That’s not palatable and no one wants to hear that, right?
They want to believe when you view it more as we’re transitioning the business, right? We’re transitioning the ownership, but the intent is to grow, right? To grow the company, help it real, you know, take it to the proverbial next level, help it realize its full potential.
So I kind of start with this idea that, you know, relax, I’m not here to sell anything. You know, we’re going to help transition, right? Transition in a way that’s beneficial to you, but your stakeholders, your shareholders, your stakeholders, your employees, your clients, that tends to be more palatable.
And it’s echoed, right? It’s echoed when you read most press releases. And I’m not saying there aren’t departures from that, but most press releases, you’ll see that, you know, so-and-so particularly as it relates to financial buyers and financial sponsors, because people are sensitive to, I sold out to the man, you know, like we sold out and they fear, well, and they fear, and this is the feedback I hear, right?
They fear reaction from employees, right? Reaction from customers and clients that somehow a sale is, can be construed in a negative context or like a capitulation. And, and so a lot of, we spend a lot of time right up front, altering the mindset, right?
That says, how do we help you view this as a good thing and a great thing and rewarding you for years of accomplishment and that the company, right? Our goal is to design an architect, a process that you’re comfortable with, right? That gives you peace of mind and creates optimism, you know, about the future, that the transition of ownership into another, other hands, right?
And maybe it is to employees or partners or whatnot, but if it’s going to travel to more of an institutional owner, right? Creating optimism and helping sellers understand that this can be a good thing and that the company, right? The buyer’s coming in with the intent to build on your success, right?
And grow and create more opportunity for your employees and, you know, elevated capabilities for your customers, you know, and that ultimately that see it as a transition, as a transition and an opportunity less than an exit.
Armando (10:06 – 10:12)
Yeah, I know. I like that. And that makes sense.
You’re looking at the continuity of the business beyond the current owners.
Lena (10:12 – 11:02)
A hundred percent, right? That it’s, you know, you can’t take it with you, right? So we’re going to, you know, we’re going to help you again, achieve peace of mind.
I was talking about peace of mind and satisfaction, like looking back and saying, we did, you know, we ran, we generated the outcome that was in our best interest. Like we did the best we could and we’re satisfied with that. We understood our options.
We understood our valuation. We considered a bunch of scenarios. You know, I never want people to feel like they didn’t know something or didn’t anticipate something or could have, would have, should have, you know, done other things.
So our job is to really over-educate, you know, over-explain, talk about lots of alternatives and help owners, you know, ultimately choose the path that’s best for them, best for their family, best for their stakeholders and that they feel comfortable with.
Armando (11:02 – 11:27)
Wow. That sounds like the best way to go about it. So Lena, when you’re having those conversations, those initial conversations with that business or the business owners who’ve not gone through this before, what are some of the, what do you find yourself repeating?
Because they just haven’t gone through this. What are some of the things that maybe surprised them that you, that you help them understand so that they can learn and have that successful exit?
Lena (11:28 – 13:21)
Yeah, that’s a great question. I think first and foremost is, well, you’ve heard me and you’re getting the sense, right? I’ll definitely over-explain, right?
And I think some people are sort of afraid to ask questions. So I think we tend to stop very thoroughly and very candidly and try to overcome, well, one way to also earn their trust, right? Trust in who you’re speaking to.
But I’d say the number one thing that we encounter is first and foremost, companies not necessarily understanding, I’d say their valuation, right? And not necessarily understanding how an outside party, you know, how a third party is going to look at valuation. So, you know, one of the earliest discussion points, right?
In those conversations is what do we think the company’s worth, right? What are the drivers of value? How do we see valuation?
What are your valuation expectations? And do you have a sense of what the company’s worth? What are you looking for?
Et cetera. So, you know, a host of questions around valuation, you know, against what an ownership group is hoping to achieve. And then secondarily is, do you understand your alternatives, right?
What do you think alternatives look like? Who might the range of buyers represent in your mind? Do you know how transactions are structured?
Do you know what to expect? And, you know, and I’m summarizing that in a simple way, but when you peel the onion on those, you know, they’re very long and lengthy conversations because oftentimes I have a sort of talk about my joke is it’s not buyers don’t come in 31 flavors anymore. It’s 3,100 flavors.
[Speaker 5] (13:22 – 13:22)
Wow.
Lena (13:22 – 15:15)
The buyer universe has grown, right? Incredibly diverse, you know, incredibly sophisticated and incredibly flexible. And so that growth in the buyer demand and buyer breadth and buyer sophistication and buyer diversity is a great thing for sellers because it means depending on what a seller wants to achieve, right?
We have a lot of flexibility out in the marketplace and sellers aren’t always aware of that, right? A sale doesn’t have to be a sale in the entirety, right? You can sell a minority stake in a business and you can sell less than a hundred percent, right?
We can involve stakeholders and protect family members and work with key employees and work with the duration over which you’d like a sale to be accomplished. And we can custom design, you know, employment agreements and ongoing employment for different parties and whatnot. So there’s a lot of flexibility though.
I think if you ask me, you know, where did those conversations start? The two major themes would be right. Digging into the valuation of business, how a third party might look at valuation.
And oh, by the way, if it doesn’t meet your expectations today, right? Are the things we can do to get there. And then secondarily, your range of options, right?
What do different types of buyers, and we can talk, you know, at some point about the range of buyers and what different buyers are looking for and what that might mean for a company. But do you understand your options in terms of transaction types, transaction structures, types of buyers, right? Which feeds into that and what to expect in each of those scenarios.
So that’s kind of the two major topics that I would think about.
Armando (15:16 – 16:08)
And it sounds like it really gets back to exactly what you started with. You said listening, listening to what are they really trying to accomplish? Because if you’ve got 3,100 flavors of buyers, then if you haven’t listened up front and really understand what they’re trying to accomplish, then it’s going to make it more difficult for you to get them going in the right direction.
So that listing sure sounds like it makes a lot of sense. And then the valuation, talk about valuation. When you’re helping them understand valuation, and maybe after you’ve seen some numbers and you give them from your perspective, what that value range is, you probably sometimes hear, I thought it was worth more, or I thought I could get more.
And then they say, well, Lena, how do we get more?
Lena (16:08 – 18:24)
Well, but my brother’s orthodontist veterinarian sold for $100 million. Why can’t I get that? So I know that’s my favorite that the guy down the street got a million times even done for his business.
No, I know. Yeah. And that’s, valuation is, that’s a very complicated subject, right?
Because there’s things that, most many companies are valued as a multiple of EBITDA, but then you have to peel the onion on that and talk about, well, what is EBITDA? What’s your business model? How is that derived?
And what factors affect the multiple? So it is definitely a lengthy conversation, but the good news is there are, every company, we are generally also able to help. If we can get in earlier, we’re able to help tweak, help do things in the short term that can enhance valuation on the backend.
So the good news is wherever you start and where you end, there are things that companies can do to get closer to what they’re looking for. And I always talk too about, we don’t always know exactly where the valuation is going to go. Now, other bankers will say other things, right?
And a lot of people will go out there and have this, you know, I say bankers, people in my position will say, well, the company is worth X, Y, Z. And I tend to soften our approach and share that our job is to negotiate peak valuation. We want to source the top of the range.
But I don’t always know where the top of the range is if I’m being fair or truthful, but I know how to find it. And how to get there is to cast the company, to do the analytical work and the preparation and the shaping and framing of the financial information and the strategic information. I talk about putting the most thoughtful, rigorous and comprehensive information in front of a diverse audience with the capacity to pay, right?
And that’s how we create maximum value for a company. And I’m going off on a lot of tangents because your questions are broad.
Armando (18:24 – 18:56)
Because this is your space and wherever you think the conversation should go, let’s just take it there because you’re the expert in this space. And that owner, that owner of the company who has not gone through this needs to understand. I guess what I’m hearing too, is they need to make sure that they tell you what they’re really trying to get to.
And if there’s maybe a primary goal, but they really have a secondary goal, they need to make sure to tell you that so you can help them and really help them.
Lena (18:56 – 21:55)
Oh, I know. And so your questions are great, right? And they can lead me into lots of different areas.
So I’ll touch upon sort of two things that you’re making me think about. The first is it relates to valuation is a conversation about valuation and transaction consideration are two different things, right? And I’ll dive into that a little bit.
So let’s take the example where you have a company, we might say it’s worth 50 million, right? Owners need to understand that being worth 50 million does not equate to 50 million in cash at close, right? Consideration, valuation is what the business is worth.
Consideration is how someone pays for that. And the forms of consideration that you might take, right? And forms of consideration can be cash.
The consideration can also be seller note. Consideration can be stock, right? Stock in an entity and consideration can be some kind of earn out or contingent consideration.
So, one evolving conversation is understanding the difference between what a company is worth or what an owner would like and the forms of consideration that they may take and how we can structure. So we always talk about using structure, right? To bridge gaps in valuation.
An owner wants this, a buyer is willing to pay that and how can we get there and how do we get creative, right? To find a zone of agreement between the two parties. So, one important distinction in valuation and even when you hear about deals in the marketplace, right?
Someone says, oh, I exited my business for 40 million as an example. What I know is that it ain’t 40 million of cash close, right? Generally speaking, right?
Cash is going to be one component but most deals contain other forms of consideration and more than half of all deals today contain contingent consideration, right? Does anybody like contingent consideration? Of course not, right?
It’s risk-based. But why do we get there? How do we wind up there, right?
Because that’s how one buyer, right? Will ultimately prevail against others in a competitive situation because one buyer will assign more contingent consideration and that’s ultimately what gets somebody over the hump, if you will. So that’s why most deals do contain contingent consideration.
So, one thread of the conversation is about valuation and consideration are two separate subjects and it’s important to dive deeper into those. And I’ll stop there and circle back to maybe mother of thoughts. Okay, no, no.
Armando (21:55 – 22:53)
And again, wherever, again, the person who is going to hear you in this hasn’t gone through a sale before. So, what is most important in those first conversations you have with them, what’s going to help him or her or that team, that’s what’s going to be best if we can just talk about that. The consideration, when you talk about a cash portion of that sale, let’s say the sale price is $40 million, what percentage of that is going to be cash?
Thinking of exiting your business? This may be your once in a lifetime opportunity to preserve your American success story. I invite you to come to the Scottsdale Founders Forum, a biannual live event for the founder considering exiting in the next five years.
More information, it’s ScottsdaleFoundersForum.com. What’s going to be stock or contingent or an earn out? What’s that look like?
Lena (22:54 – 25:08)
It’s a great question. It’s not going to surprise you by what the proverbial, it depends. It depends.
And I wish I could be more crisp, but it’s generally a function of one, how is the business valued? So, is it valued as a multiple of EBITDA or is it some kind of SaaS company where we’re looking more at a revenue multiple? So, there’s one, we have to understand the basic structure that we’re stepping into.
If a loose guideline, it generally should be more than half in cash. Just because I’m thinking about if a company is generally a growth business, you’re trying to sell somewhere, eight times EBITDA, maybe north up to 10 times EBITDA for very high quality, strong, high growing businesses. So, the higher the multiple, the more you can expect non-cash consideration.
That makes sense because if you’re pushing the valuation and you’re pushing the multiple, that’s when the buyer is going to start to get uncomfortable and they’re going to want other forms of consideration than cash. If the business has a lower valuation multiple, five times, six times, then the buyer’s taking less risk. It’s more of a stable scenario and you can expect to see more of the consideration in cash, maybe more than 50%.
So, the order of preference would generally be, of course, sellers would like cash. The next form of consideration that we tend to look at are seller notes. No one starts off by saying, I want a seller note in my deal.
Oftentimes I hear, I won’t take a seller note. But when you explain, but guess what? You’re a senior in the capital structure.
You’re in front of the equity coming from the buyer and a seller note is contractual. It’s a contractual commitment. So, when you explain what a seller note is, what the benefits of it can be, it’s contractual.
So, after cash, it can be an effective form of consideration for getting a deal done.
Armando (25:08 – 25:10)
It sounds pretty solid.
Lena (25:12 – 25:12)
Hopefully.
Armando (25:13 – 25:13)
Yeah, hopefully.
Lena (25:13 – 27:37)
It’s just eyes wide open. Eyes wide open. I think our job is to explore it, talk about it, chew on it, think about it.
And if it makes sense, look at it because it also lets a buyer pay more because they can borrow so much from their bank or a mezzanine lender. And that’s a different discussion. What are different capital sources and what do they need and how do they work?
But a seller note can be a way for a buyer to pay more because a seller will assign, we want safe leverage and prudent leverage, but it’s a way for a buyer to pay more to get favorable terms from the seller and it’s a way for the seller to get a contractual return, do something with their cash. So, it can be a creative tool. After seller note, then we tend to think about stock and the entity.
Now, that’s a different set of objectives. We hear the term rollover, rolling equity, participating in equity, financial buyers. That tends to be consideration that they use.
And when companies, if they do sell to what we call a financial buyer, a private equity firm, a financial sponsor, again, we use all of those synonyms. Oftentimes they’re taking back stock because again, it helps the return for the buyer. It aligns incentives, right?
The seller’s holding some stock, everyone’s incented to grow the company. At the private equity firms, those financial buyers, their job is to generate a return on their cash, right? So, the less cash they put in the deal, the higher the return.
So, they’d like to use stock to achieve, to align incentives and achieve their returns. And then lastly, is that form of contingent consideration, right? That risk-based both sides, but a way to bridge the gap in valuation and a way to get that higher multiple.
And of course, there’s other forms of consideration, employment agreements, working capital excess, carving out assets, excluding assets. So, our job is to maximize valuation and maximize consideration on a host of fronts. But the four majors that I just talked about, cash, seller note, stock and an earn out tend to be the four most common.
But no surprise, we’ve got other tricks up our sleeve. We can try to maximize and we’re compensated on all forms of consideration. So, we have a lot of incentive, right?
To try to get creative and get our sellers everything that we can.
[Speaker 5] (27:38 – 27:38)
Yeah.
Armando (27:39 – 28:28)
Well, I’m glad you touched on all of those because as you said, there’s a lot that’s in there. And again, them talking with you and you listening and hearing what they’re saying, but they really got to be up front with you about what they’re really trying to accomplish so you can really help them. I do have a question for you.
I spoke with a business owner who sold years ago and he was on the fence about taking stock or getting cash and just wasn’t really sure what to do. And the safe thing, of course, is cash because cash is cash. And so, he went the safe route and took cash.
And then after selling, the stock went up 10 times. So, he said, you know what? I’m still good though.
I still did great. And that’s the risk.
Lena (28:30 – 32:38)
100%, right? Again, I have this expression too that we talk about owners saying that where the transaction starts and where it winds up are typically pretty different. So, I tend to…
An owner like that, right? I view my job as, well, let’s surface some options for you, right? Which feeds into generally speaking, talking to different types of buyers.
And backing up, right? This presumes that a company engages a banker for sale, goes out and runs a process, surfaces different offers. And there’s lots of what we call direct transactions.
So, we can talk about whether or not you engage direct and running a process or not. But in the context where you’re open-minded, you’re willing to review strategic alternatives, which is a euphemism for talking to multiple buyers, then we would tend to surface interest from different types of buyers, right? So, strategic buyers tend to pay more in cash or maybe something in stock if it’s a public company.
And it’s financial buyers that oftentimes values what you’re more likely to take stock because they want you to take a piece of stock and keep a piece of the business. So, our job is to kind of create alternatives, right? And have you weigh alternatives and go through the pluses and minuses.
And people oftentimes do wind up taking stock from private equity because if they are going to get tens of millions of dollars, the question is always, what are you going to do with it? And the exercise of the mindset that is a huge transition for business owners is that they go from taking tremendous risk in their own business or having this risk appetite in their own business, right? They’ve owned something for a long time, they’re entrepreneurial, they’ve grown it.
Now, to entrepreneurs, that’s not risk, right? Obviously, entrepreneurs don’t feel risk or don’t, yeah, that’s why they’re entrepreneurs. But we would, as outsiders, generally say they’ve assumed a fair amount of risk in their own business.
If they’re going to convert that to 20, 30, 40, 50 million of cash, well, now their wealth advisor, their job is to preserve that capital at 5% return, 6% return. Think about the mindset, right? You’re going from being concentrated in a very large company, we would say that generally has risk, to now you’re trying to preserve capital at 6%.
So it’s being thoughtful about that discussion and, oh, by the way, for companies to get help from wealth advisors and have good financial planners, wealth advisors, and getting that advice and full disclaimer, we are not in that business at all, right? I need someone else to work with owners to really talk about their personal wealth goals. And if they do engage in a liquidity event, what are they going to do with the capital?
And what are the different investment options and alternatives? So that the decision whether or not to take stock, right, feeds into an overall financial plan. And that they’re comfortable with the risks, you know, of owning that stock, you know, is the stock, because to own stock, right, when it’s going to bind you to that buyer for a while, right, they oftentimes are not going to, the family that sold or the company that sold is not going to have a lot of weight, if any, about when they would ever get liquid, you know, in that rollover.
So it’s definitely a loss of control. It becomes a financial investment in a way, but also can continue the emotional connection to the company. So there’s things to think about.
You know, the goal is, I tend to tell people, as long, you know, it may not grow, it may grow at 5%, or 6%, like your wealth advisors trying to do for the rest of your cash, you know, the other side generally wants to grow more, right? Most private equity firms have an internal hurdle of around 15%, right? So they’re your financial partners trying to grow that stock at a 15% annual return.
Could it go to zero?
[Speaker 3] (32:40 – 32:40)
It could.
Lena (32:41 – 32:47)
It’s a doomsday scenario, right? It’s a doomsday scenario, because it’s really wrong.
Armando (32:48 – 32:49)
It wouldn’t be the first time it happened, though.
Lena (32:50 – 32:59)
If things went really wrong, but which may, maybe that’s why you want to sell or note, because if it does start to go south, right, you may be the senior creditor.
[Speaker 5] (32:59 – 32:59)
Yeah.
Lena (32:59 – 34:19)
As long as you pay the senior lender, you can get your company back. It’s rare. We tend not to, luckily that, you know, knock on wood, it hasn’t happened.
But it’s a possibility. So, you know, no surprise, you’re going to be eyes wide open, right? Evaluating options, evaluating alternatives, being thoughtful about who is on the other side, who is the buyer?
Do I want to co-invest with this buyer? Does taking stock make sense? Or, you know, am I looking for something that’s more predictable?
So I have an expression that the more flexible, right, the more flexible you are, generally speaking, the more value we can negotiate. But it’s always a seller’s decision. You know, always a seller’s decision.
So we’re here to educate and explore. And ultimately, right, sellers will make the decision of what’s best for them. But I think it’s kind of coming full circle, that our encouragement is being proactive, right, being proactive and identifying upfront, right, what you’re looking for, what your alternatives might be, as opposed to the inverse being reactive.
And we can talk about this. And the reactive is like, hey, a buyer calls a company.
[Speaker 3] (34:19 – 34:20)
Yeah, right.
Lena (34:20 – 34:23)
That’s a scenario that we can spend a little time.
Armando (34:24 – 34:32)
Yeah, you called that the lowest offer they’ll ever get in a conversation that you and I had.
Lena (34:32 – 35:30)
It is. Did you see me cringe? Yeah.
What makes me cringe, right, is, yeah, a company gets an unsolicited call, right, from a buyer, financial buyer or someone, and quote, unquote, well, I sent him the financials, you know, I sent him my information, and they’re going to get back to me with, you know, what they think it’s worth. So that’s our worst case. That’s our nightmare.
Because once information has been released, you know, there’s not much you can do. And many, many companies do make that mistake. They take a call, they get engaged, they call their attorney, and they sell to that buyer.
So it doesn’t mean it’s a bad deal. And it doesn’t mean it wasn’t a good party and that these two can’t live together. But you know, there is zero probability that they maximize value.
Armando (35:30 – 36:16)
Yeah, I spoke with I had breakfast with a retired CEO yesterday. And he helped a friend of his who had a little hobby business, and kind of out of the blue. They just had a conversation and the hobby business, the former CEO said, Well, have you thought about, you know, selling it and just he just helped him out.
Anyway, long story short, the first offer was for $2 million for the business. CEO navigated it and just did just what you said, did not release financials till they were nice and ready to be released. And they had the conversation, ended up getting $18 million for the business.
He was offered 2 million. And he thought, Oh, you know, this is my hobby 2 mil. Hey, that sounds great.
[Speaker 5] (36:17 – 36:17)
Right?
Armando (36:17 – 36:32)
He got $18 million. Because he had someone come in, who, like you knew how to navigate that space, and drove the value up so much. It was incredible just to hear tell the story.
I’m sure you have stories like that as well.
Lena (36:33 – 37:40)
Well, I’d love to say we got nine times. I don’t know if I can match that. But I’ll promise you, it’s more than our, you know, more than what we charge.
So it’s it, by definition, a buyer working in what we call a vacuum, a buyer in a non competitive process. I go, even if you don’t hire us, call that party and tell them you hired us, you know, and the offer is going to go up just because, you know, and there’s zero chance a buyer, you know, a buyer without a competitive process that has no, no incentive to pay, right, maximum value, and you start getting no maximum value until you have, you know, more than one buyer in the process and something that’s more competitive. So and there’s, you know, there’s a cost to a process, you know, it takes time and effort and money, and it’s not without disruption. So there’s definitely, you know, factors to take into consideration.
But a lot of companies do sell directly. There’s lots of attorneys in town, right, that they’ll just negotiate with an attorney. And unfortunately, I think at the expense of maximum value, right, right.
Armando (37:40 – 38:14)
And you and you touch on the point that every part of that business owners team has an expertise. This is your expertise, not their CPA, not their attorney, this is your expertise, not to disparage their expertise, because that’s not your expertise. Your expertise is exactly what you’re talking about.
Helping, as you said, helping them maximize value, understand value, and help them navigate the transition of that business to the next owner who can then do continue that business to that next level, whatever that is.
Lena (38:15 – 41:13)
So, again, I need to bring you right to our meetings, because you do a great job in, you know, advocating for our industry. But I think there’s two anecdotes I would add to that is that the first sort of hesitation or objection, right, that we see up there is the idea that, oh, my CPA, like my CPA can help me, right? Or, you know, I have a CPA, I don’t, why do I need, right, I need the services of a banker.
So I hear that a lot. And what I’ll share is that most CPAs, we need CPAs, and they’re a valuable part of the team. And, you know, a great CPA is absolutely a resource and someone you want on your team.
But most CPAs, their, you know, their job is to prepare financials for the IRS, right? Prepare financials for tax purposes, right? And they don’t necessarily really focus on what we call a chart of accounts, right?
And a chart of accounts is how a financial statement is presented, right? And the degree to which it articulates the business model, right? The IRS just cares about taxable income.
They don’t really care about where expenses are, just so long as the expenses are recognized. So I think the first discussion point is the difference between CPA prepared financial statements, which are oftentimes for tax purposes, or even for internal consumption, internal review, right? Versus the way our firm would look at financials, and more often than not, we’re reshaping and recasting financials to be incredibly rigorous and disciplined about the chart of accounts, how the financials are crafted, and importantly, what they convey, right, to a third party, what they convey to the outside.
So again, first hesitation is, hey, I’ve got a CPA, right? Why do I need third party advice? So that’s a discussion we have.
And I think a second objection tends to be what I call fee sensitivity. And I get by the time you start thinking about getting good legal advice and getting invested banker, right, people start to rightly so, you know, think about fees. But we have a discussion that says, well, are you fee, you know, are you fee focused or outcome focused, right?
And when we spend time on the outcome, you know, particularly the larger the company is, and look at your example, right, 2 million versus 18 million, but the larger the company, right, the greater the stakes, right. And so, right, talking about valuation can swing, you know, even in smaller deals, valuation can swing in the millions, right, not to mention the forms of consideration you take, what the aftermath of that is, what that might look like. And so I think we have the discussion that says, you know, you’re paying fees, yes, in a way, but you’re investing, right, in an outcome.
And I think we can demonstrate with a lot of certainty and quantitative examples about the return on that investment.
Armando (41:14 – 41:58)
Right. And you touched on earlier about in the bigger context of that family, the family, once they’re, once they’ve transitioned out of the business into the owner’s transition out of the business, in their picture going forward, what makes the most sense for them? You talked about that in the context of do they take this stock as part of deal or get a note or be happy with the cash?
But what we’re often looking at and always really looking at is the owners of that business, they started this on day one, grew it to something, they’re going to transition out. And we’re concerned about that family beyond the sale and what’s going to make sense for them. So it really gets back to looking at in the big picture, what are they really trying to accomplish and what’s important to them?
Lena (41:59 – 42:33)
Of course. And no surprise, I think what you’re also bringing to light is juggling a host of variables, right, particularly as relates to family owned companies. I think one of the things we see a lot is multiple offspring, right?
You know, it could be mom and dad or husband, wife, own a company, and they may have more than one child, if you will, or even, you know, brothers, whatever, son-in-laws, that kind of thing. And, you know, some are active in the business and some aren’t.
[Speaker 4] (42:33 – 42:34)
Right.
Lena (42:34 – 42:55)
So then it becomes, okay, how do we navigate that? Right. And who’s getting what?
And is anyone staying in the company? And oftentimes, one or two of the kids has worked in the company, one or two have not. And then the parents are juggling what I do with cash, I have the trust, am I getting stuck?
And there’s a lot to unpack.
[Speaker 5] (42:55 – 42:55)
Right.
Lena (42:57 – 45:23)
But that’s very much, it’s very common. And we’re used to having conversations about, you know, confusing what are, what’s the next generation, you know, how do you want to divide consideration and reward those that are working yet feel like you took care of your family, etc. So, and a wealth advisor is an important part of that discussion as well.
So it’s common. And I think another thing that I’m writing down the note is I find myself writing, it’s not always about the money. Right.
It’s not always about getting the highest value. And as much as our job is to maximize value and talk about valuation and talk about outcomes, etc, etc. You know, beneath that, I think when you dive deeper, oftentimes sellers are not entirely motivated by money.
Right. And it’s something else. So, and there’s, you know, a range of, is it legacy?
Is it honoring generations before them? And the emotional elements of doing right by stakeholders, employees, economic opportunity, not wanting to change the culture or the inverse of that wanting to preserve their culture, right. And fear that the transition is going to, you know, harm or compromise other things that are important to them.
So, you know, I’ve got this note that said, you know, it ain’t always about the money and we, and, or just what does life look like? Right. And I’ll pick on one dear, dear, you know, seller.
Now this family that I just love and the husband, I’m just being very candid. Like he simply cannot envision when he gets up at five o’clock in the morning, he cannot envision not driving to the office, you know, I literally can’t. And so, you know, that is probably outside of my area of expertise, help this guy figure out what to do.
But, you know, I love them dearly and we want to find, you know, what’s next for them. But it’s fun to engage in this literal conversation that, you know, the sellers have to sort of, they get to determine, you know, the timeframe that’s right for them and the timetable and how that works. But that was definitely in the category of, it may not be about the money, right.
It’s, it’s defining what life looks like with change.
Armando (45:24 – 45:55)
So Lena, how do you get them? It sounds like it’s really critical for you to understand what they’re trying to get to and what’s important to them. And that takes conversation.
As you said, multiple conversations. How do you help them feel comfortable that they can, that they can share that with you? Because this can be very, very personal reasons or personal, you know, deep emotional thoughts they’re having.
And they might be reluctant to share with you on day one because you’re brand new to them. How do you help them get that comfort and share that with you?
Lena (45:56 – 47:07)
I find myself saying I’m not always successful in that. No, but I’ll give you an example, you know, and again, a seller that, you know, what potential seller that we’ve been talking to for a couple of years, right. It is a wife inherited a company because her husband passed suddenly.
Right. And so it happened five years ago and she has doubled the value of the business. I mean, this is a very large company with 500 employees.
You know, she has done to me an absolutely spectacular job in growing, in evolving something, you know, for my joke in a job she didn’t ask for. Right. She never intended to do this alone.
But the hesitation, she definitely is not comfortable, right. With selling the company right now, because for reasons which are personal to her, but I believe it to be what will employees say, you know, will they look at her in a critical way? Right.
That she somehow is defying the memory, right.
Armando (47:07 – 47:13)
We’re not honoring the husband who, who, who built, who helped build this company to what it is.
Lena (47:13 – 47:37)
So, and that’s where it’s, again, it’s a very large business. So you could argue that this would be more money than right. Someone could spend in a lifetime.
It’s a very valuable company. And so I, as I’ve spoken to her, you know, I share the idea that you, you sound really hard on yourself, right. If I’m an outsider to me, you doubled it from where it was.
[Speaker 3] (47:37 – 47:37)
Yeah.
Lena (47:38 – 47:42)
You know, there’s everything, you know, that you have so much to be proud of.
[Speaker 3] (47:42 – 47:42)
Yeah.
Lena (47:43 – 48:51)
But I have not been successful in, you know, helping that company think about its transition. So my candid answer to you is we’re not always successful because it’s not always about the money, right. It’s about other things which are personal to those sellers.
So how do they finally get there is unique to the circumstance and unique to the individual. I can only share, you know, I can only guide them as to what to expect, right. What we can do for them, what I’ve seen others do, you know, I can share experiences, share perspectives, encourage and try to encourage a candid open dialogue, you know, and those people and sellers and owners ultimately need to seek guidance from, you know, people that are important to them.
And so, yeah, I find myself saying I’m not always successful in that way, but at least, you know, I’m trying to be transparent, candid, empathetic and service a resource.
Armando (48:52 – 49:05)
And it’s got to be right for them. They’ve got to feel good about it so that they don’t have any regrets and don’t kick themselves after the fact, because for most, this is a once in a lifetime transaction for them.
[Speaker 4] (49:05 – 49:05)
Absolutely.
Armando (49:06 – 49:14)
And they want to feel good about it when it’s all done, whatever that means, whatever that outcome is, they want to feel good that they made the right decision. It gets back to what you said also.
Lena (49:14 – 49:17)
Peace of mind. Absolutely. Peace of mind.
Armando (49:17 – 49:30)
And you said understanding what are those exit options? What are the different ways that they can transition the business? If they don’t know, then dialogue with you can certainly help them understand that.
Lena (49:31 – 49:38)
And it’s back to we didn’t sell anything, right? They sourced a capital partner for growth.
[Speaker 5] (49:38 – 49:38)
Yeah.
Lena (49:39 – 49:52)
And that’s what the headline would say, right? That’s the message to employees, right? The morning after we close something, right?
The announcement to the employees is we partnered with so-and-so for growth. Yeah.
Armando (49:53 – 50:13)
And for that woman, the widow who you mentioned, if she knew that, if she viewed that company as husband’s legacy, and now she brought in a big partner who could then take it and grow it even more and make it a household name, that might feel really good to her. She might feel that that’s something that he would be proud of.
Lena (50:13 – 50:21)
Of course. I see so much good and potential, but I can’t pretend to understand her loss.
[Speaker 4] (50:21 – 50:21)
Right.
Lena (50:21 – 51:18)
And the strain, right, of operating something. Again, the job she didn’t ask for. So time will tell, and it’s a great company, and something will happen eventually.
And that’s just one story, but I think it’s illustrative of examples out there that every circumstance, every seller, and every company is unique, but family dynamics and non-financial considerations are part of this recipe and part of what we encounter. And again, I always view my job as educating, inspiring, sharing experiences, and trying to help owners feel like they at least got information, and then they ultimately get to decide what’s right for them.
Armando (51:19 – 52:19)
Selena, a question for you. You touched earlier on offspring. We often call those adult children that might be in the business.
Maybe they’re part of the succession plan. Maybe mom and dad who run that company and own that company are not quite sure they want to navigate a successful transition for the business and want to be true to their family as well. And that can be easier said than done.
You’re a mom, and you understand that dynamic of raising children. How do you help them in those conversations so they can get to a place where it feels good that they’ve made some kind of decision, or are you able to help them? What I’m thinking really is that as a mom, you’ve been through some of those dynamics yourself with your own adult children, and I would think that that would help you navigate some of that maybe with the clients as well.
Lena (52:20 – 54:47)
Yeah, that’s a great question. I think I find myself saying we’re not as close to it, right? I don’t have an emotional horse in that race, right?
So when you’re less emotional about it, I tend to at least bring perspectives about, yeah, oftentimes I see adult children that one or two are in the business running it day to day, right? Yet the parents feel like they need to divide, say there’s four offspring, right? They feel like they need to divide things four ways, right?
And aren’t necessarily clear on the value that the kids that are actually active in the business. I probably advocate for the kids in the business, right? Because I should be more clear, because if it was a third party, right?
If it was a professional CEO or COO, right? I can substitute the role that that adult child is, you know, if I have to replace that kid, right? I can articulate what it would cost and what they would expect.
So it’s kind of what they might expect if you had to replace the role of those that are operating it versus the passive, you know, the kids that may not be in the business. So I’m probably not answering your question in a very crisp manner. But I think it’s about clarifying roles and the value of the roles, right?
And entitlements as owner operators and entitlements as heirs or beneficiaries. So, but I think our firm is probably a smaller advisor in that capacity. And I kind of want to push that back on the wealth advisor again, you know, where a good wealth advisor can really look at the overall estate, because oftentimes there’s other assets in the estate.
Oftentimes, there’s real estate, you know, the parents may have built other forms. And so it’s a discussion about how much is, you know, what do you need? What does the family need?
What are you trying to achieve? How many families are you trying to, you know, reward or set up here? So I think a good wealth advisor is, again, it is an important player to try to clarify what does the family, the broader family need.
I can speak more to kind of what’s going on inside the business, the company, and then hopefully a wealth advisor can help see the totality, like the totality of a picture.
Armando (54:48 – 54:59)
And we do have those conversations with them about, you know, what is the overall net worth? And if you’ve got a couple of rental properties, maybe earmark those for the kid not in the business.
[Speaker 4] (55:00 – 55:01)
Exactly, right.
Armando (55:01 – 55:52)
That’s what they get. They feel they’ve gotten something. And is that going to be the parents always want the kids to feel like they’re being fairly treated.
And they don’t want any child to dislike the others or have aggression towards another because they were favored. So yeah, it’s looking at that big picture and looking at those assets. And really, you know, I’m the third out of four sons.
So, you know, growing up in a four boy family, learn how to navigate the older and the younger, and you learn how to navigate some of those. So I use that experience when I’m talking with a client, and it has proved very, very helpful for me to help have those conversations when they’ve got their four kids, and they’re trying to divvy things up and be fair in the context that a parent sees fair.
Lena (55:53 – 56:40)
And you hit on the word, have the conversations, right? Like talk about it sooner than you want to get help, clarify it, clarify it in writing, because I can point to an example. I’m pointing to Gilbert, right?
There’s a company I know in Gilbert, right? $40, $50 million business, both parents, you know, passed away, lack of clarity, five offspring, and there’s litigation, litigation between the offspring, right? Which craters the valuation for the company, unsellable, right?
While so, you know, parents did not transition it according to their wishes while they were alive, you know, lack of clarity for the five siblings, and now litigation between the siblings. So, you know, cuts the valuation of the company probably in half by my estimate, and it may be worse by the time it’s all done.
Armando (56:41 – 57:12)
And it’s, that’s kind of, that’s also just about worst case from the parent’s perspective. Parents always want to feel that when the parents move on to that next, you know, this life is done for them, they want the siblings, their kids to remain as a family, see each other over the holidays, and have that kind of relationship. They don’t want to intentionally set up anything that works against that.
But the parents that you described with the situation now is not, not what they want.
Lena (57:13 – 57:23)
Now, it’s heartbreaking, because they appoint one child as a trustee, and other kids are arguing, she was not lucid at the time of the appointment, right? Which means it wasn’t done early enough.
Armando (57:23 – 58:04)
Yeah, we I had a conversation with a client just a few weeks ago, and he has three adult children, he and he was going to make his daughter the the trustee of the estate, because she was the most responsible. And I told him, you know, don’t do that. Because what’s going to happen is her two brothers are going to look at her as the gatekeeper, the one controlling the purse.
And they’re going to be angry with her because sister isn’t cooperating, and sister’s not giving the money. It sets up an environment where there’s siblings are going to have this, this, this, this bad relationship, make it a corporate trustee instead. And let’s make that corporate trustee, the bad guy.
Okay, yeah.
Lena (58:05 – 58:50)
Again, happy to outsource those kind of discussions, right? Yeah, you know, people that have more expertise in that great, our focus is the business and, you know, maximizing the value for the business and strategies for accomplishing the objectives of the shareholders. But you’ve raised all the good points, you know, get advice, get it early on, clarify these things, clarify objectives, talk about objectives, and try to get people on the same page, right?
shareholders on the same page. Because, you know, that’s a corollary here, when shareholders and ownership groups, they’re not on the same page, right? It’s oftentimes damaging to enterprise value, right?
Versus if we can get people aligned, get shareholders rowing the oar in the same direction, right, it’s generally going to contribute to a better valuation.
Armando (58:51 – 59:38)
So Lena, let me let me take you back to we talked a little bit earlier about, about the, the owner of the business finding a buyer, or they connect with a buyer directly. And they work directly with that buyer, they, and I’ve heard this before, I’m smart, I can figure it out, I don’t need to pay somebody to help me do this, because I can do this myself. And they find that perspective buyer, maybe it’s the competitor across the street, they strike a deal with them, then they then they bring in the attorney to draft it and make it legal, and they’re done.
And they feel pretty good that that they feel pretty good about that. Now, from your seat, when you look at that, what do you see as what are your thoughts on that?
Lena (59:40 – 1:01:56)
Well, I think I shared it earlier, it’s, it’s, it, again, it may be efficient, it may be someone, you know, you may have sold to someone that you ultimately felt comfortable with. And it just means, by definition, it didn’t maximize value, it couldn’t, it can’t, right? Because, as we shared a buyer in a vacuum, in a non competitive process simply is, you’re never going to know full value or maximum value, right?
Until you have a competitive process and more than one better, right? Unless there’s just some unicorn scenario out there, which is very unlikely. Because the, you don’t have the benefit of advocacy, you don’t have the benefit of perspective.
And by definition, the seller is too close to it. Every seller is emotional, right? It’s, you can’t not be, right?
It’s your baby, your business. So, so again, I don’t want to necessarily always characterize it as a bad thing. Because, you know, it might have been, at the end of the day, if the seller is comfortable, satisfied, and has peace of mind, right?
Yeah, they got that, right, just at the expense of a higher valuation, it doesn’t mean a higher valuation, too, doesn’t come with other aches and pains. So I don’t always want to sound, you know, too critical over that scenario. But I think it’s just important to be eyes wide open, right?
Just eyes wide open, understanding that you can do that. And there’s a benefit to doing that. But you gave, you know, you got some things, but you probably gave some things up.
So for, you know, to me, an investment, you know, some investment in some professional services could yield a significant increase in valuation, you know, given like the example that you shared. But again, I would want to know that I looked at lots of alternatives, and maybe you choose that buyer, because we can always involve that buyer in a process, we can front run them. But I would, you know, I would want to compare it to other things.
And I think we all know that if we went out and got competing bids, we’re pretty sure that buyer would pay more.
Armando (1:01:57 – 1:02:48)
Right, right. When there’s competition, it drives up the price. Yeah, that makes sense.
So let me, let me, let me, I want to summarize some of the points that you’ve made. And you mentioned about, you know, maximizing value, you know, helping, helping understand, helping the owner of the business understand value, what drives value, what is the valuation range of that business, and the valuation range might not mean they’re going to get a one big fat check for that amount, it might mean they’re going to get maybe half or more in cash. And then the other half might be something else, it might be stock, it might be a note, it might be an earn out.
So a $50 million sale doesn’t mean 50 million cash, maybe it means 30 to 40 million or something in cash with with the other part of being some other, as you said, consideration, transaction consideration.
Lena (1:02:49 – 1:03:03)
I think the higher the multiple, the more flexible, you know, the more diverse the consideration, right? The more something is worth, but when I say worth, worth is a multiple, the higher the multiple, the more we can expect diversity of consideration.
Armando (1:03:03 – 1:04:28)
Okay, great. And then you said, I liked what you said, don’t, when I use the word incorrectly. You gently corrected me and said, let’s not let’s let’s look at it this way.
Instead, Armando, let’s look at it as a continuation of this business, which is evolution. That’s why there’s somebody, a company out there who wants to acquire this business, because they want to continue this baby that the owners created years ago. And it has a value, you help them understand the value, help them understand what that range is and help them to maximize that value.
But this is a continuation of that baby. And maybe the woman you mentioned, who’s the widow now five years, if she viewed that as the continuation rather than anything else, it might help her feel a little better about being able to transition to the next stage of her life, whatever that would look like. You also mentioned that there are lots of alternatives to for them to step out.
Lots of ways that that owner can step out of the business and the business can continue. And part of what your responsibility is and what you do for the people you talk with is you help understand what those alternatives are.
Lena (1:04:29 – 1:04:50)
I want my sellers in the driver’s seat. We’re going to dictate what you want and we’ll find some flexibility about that. We’re not going to react to what a buyer wants to do.
We’re going to be proactive and define what you want and give you some options around your objectives.
Armando (1:04:50 – 1:05:32)
You mentioned that one year, one of the key things you must do right up front with them and ongoing is listen, listen to what the owners are really trying to get to. And that may take several conversations, but by listening, you said that the buyers, it’s not 31 flavors anymore. More like 3,100, lots of, lots of ways that things can be put together.
And that’s where the creativity and flexibility comes in that you can help them navigate because that, that, that perfect solution may exist and you can help them understand what that looks like. And you can help make that happen for them.
Lena (1:05:33 – 1:06:27)
Absolutely. And when you think about the investment banking model, right? Deals take a long time, right?
We’re generally going to work on something for six to 18 months. So if we don’t define your objectives or somehow we don’t satisfy, you know, what you’re looking to do, that’s disastrous for us. Right.
Because it’s a huge loss. If we work on something for a year, you’re not happy and we don’t transact. So right.
Inverse, right. We’re, our model is risk-based. So I, we succeed when the seller succeeds, right.
Cause generally we’re on the sell side and sometimes you represent buyers. So, but generally we represent sellers. So, you know, we succeed when a seller succeeds.
So as you know, a seller needs, our job is to help the seller, you know, get to where they want to go.
[Speaker 3] (1:06:28 – 1:06:29)
Yeah. Okay. Good.
Lena (1:06:29 – 1:06:48)
And there’s no benefit to us to, you know, not align on to work on something for a year and it doesn’t happen is, is it, is a poor outcome. So our entire business model is predicated on, you know, happy sellers that are satisfied and feel good about what they ultimately achieved.
Armando (1:06:48 – 1:07:48)
Yeah. And that, that gets to your, to your point about listening, listening to identify what are they trying to get to, to get the more efficiently, maybe a little more quickly. You also talked about family, family in the business, family outside the business, you know, the, the offspring, the adult children who might be in the company and outside and really had to navigate that and help them understand that the, the, the adult children in the company are adding value.
They have a salary. That’s fairly easy to quantify with, with, with the measuring stick versus family. It’s not in the business, not contributing to the value of that company and use the expression several times, but eyes wide open.
I like that eyes wide open. You’re helping them understand. And that way they know when they, when they take that step, you’ve helped them understand what that step is going to look like before they take it and help them understand with what they’re trying to accomplish that, that these are their, their options.
And you can navigate that with them for them for their benefit.
Lena (1:07:48 – 1:08:23)
Absolutely. Right. It’s ensuring values transferable, right?
So who’s in the business, who has tribal knowledge, who are the key employees and if they are offspring, right. It’s a, it’s a unique, you know, we always have talked about what’s a buyer getting right. And in the team, right.
There’s a joke that says, you know, buyers don’t buy companies, they buy people. So, you know, people are paramount and it’s, you know, unique when they’re family members. So there’s a lot to navigate there, but, you know, transparency and discussions are the way to get there.
Armando (1:08:24 – 1:08:39)
So Alina, anything that we haven’t touched on, the thing is really, really critical for that first conversation you’re having with that, with that first time with the owner who is now is understand they need to transition any, any, any points that we didn’t touch on in this conversation so far.
Lena (1:08:40 – 1:09:32)
I think you’ve done a great job. You’re obviously very knowledgeable, right? This is not your first podcast.
You’re very good at asking questions, but, but I love, you know, I love your sincerity and your desire to educate and to help. And I think as professional service advisors, right. That’s ultimately our role.
So, you know, I think anything, I hope your listeners or anyone watching this content, you know, the encouragement is to, you know, be open-minded and, and a lot of, there’s a lot of free information out there, right. People like me, I’ll grab a cup of coffee and host people in my office and that’s free. And there’s a lot of people in our industry, right.
That will chat and get to know you. So, you know, seek information, get guidance and, and build a team of trusted advisors. And, and ultimately that’s, I think we’re all, our, all of our incentives are aligned.
Armando (1:09:33 – 1:09:42)
Yeah, I agree. So Selena, let’s say that someone heard this and just really liked what you said and wanted to have a conversation with you. What’s the best way for them to reach you?
Lena (1:09:43 – 1:10:09)
Oh, that’s terrific. So, you know, we have a website, my phone number, you know, my website is linkbig.net, but it’s Lena Dalby link capital. And my phone number is on the internet.
So feel free to call, email. And if we don’t get back to you, call you and tell you to call me. That’s right.
No, we try to be responsive and yeah, always happy to have a conversation. So I, hopefully we’re pretty easy to reach.
Armando (1:10:10 – 1:10:33)
Okay. Fantastic. Lena, thank you so much for the conversation.
This has been really, really helpful. I’m so glad to hear what you’re doing and the experience that you have in this space is just invaluable as part of that exit team and being the lead on that team for them for this once in a lifetime transaction for the family. This is just such a critical role.
So thank you for what you do in that space and helping them navigate that.
Lena (1:10:33 – 1:10:38)
Thank you for the opportunity. We’re really honored to be your guests. So thank you so much.
Armando (1:10:38 – 1:11:08)
Fantastic. Thinking of exiting your business, you may have only one chance to get the sale, right? Your family depends on it.
Come hear experts who plan and negotiate successful business exits for a living. Bring your questions, live panel discussion followed by Q and A. Join us at the next Scottsdale Founders Forum, a biannual live event for the founder considering exiting in the next five years.
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