Armando (0:00 – 1:03)
Hi, I’m Armando Roman, host of the Founders Guidepost. You’ve built your business over decades and now it’s time to think about that once-in-a-lifetime exit. You’ve come to the right place.
Here, you will hear business exit professionals talk about what you should know before exit. Besides hosting the Founders Guidepost, I’m CEO and founder of Axiom Founders Family Office, a Scottsdale wealth management firm helping founders and their families preserve their American success story. We oversee and coordinate a network of vetted professional advisors to help maximize their probability of achieving everything that is most important to you.
And we host the Scottsdale Founders Forum, a biannual live event for the founder considering exiting in the next 36 months. Here’s to your hard work and your American success story. Enjoy.
Hi, Armando Romano here with Axiom, talking with May Lu from Tiffany & Vasco. And May, thank you so much for your time this morning. How are you doing?
May (1:04 – 1:06)
Great. Thank you so much for having me here, Armando.
Armando (1:06 – 2:13)
Great. So Tiffany, I’m sorry, I’m thinking Tiffany & Vasco, but for May, the purpose of our conversation this morning, as you see here in the Valley, as I do as well, people are getting offers from out-of-state, from private equity firms, from all kinds of places to buy their businesses. So if we can just have a conversation this morning about things that people should think about.
And so just to frame the context a little bit, this is really intended for that, say there’s a couple who runs a business, maybe a husband, wife, or a husband-wife team. They’re over age 50. They’ve had this business now for maybe 25, 30 years.
They’ve never sold a company before, but they’ve built a really fantastic business that’s now worth millions. And with most business owners, they have all of their wealth in this one company. So getting this exit right is really critical for the long-term health and well-being of that family.
So if you could, May, introduce yourself and talk about what you do, and then let’s just have a conversation that can help that business owner.
May (2:13 – 3:41)
Of course. As Armando said, my name is May Liu. I am a at the firm of Tiffany and Bosco, which is a local law firm that has, of course, grown over many years.
And we have multiple offices in other jurisdictions as well. But I primarily practice here in Phoenix, Arizona. I am a business transaction attorney.
Despite all the M&A activity going on here in Arizona, it is a little bit not as full such that we could keep ourselves 100% busy. So I do other business transaction matters, such as operating agreements and other things like that. But I do have a rather large focus on assisting closely held businesses, family owned businesses.
We don’t represent public companies on their succession planning. So this is a topic very dear to my heart. And as I mentioned to Armando, when I first met you is that my parents, while I was growing up, we had a small Chinese restaurant.
We sold the restaurant, but it was not for it wasn’t a big price or anything of that nature. But it was big at that time for us. But I went into business for undergrad and then went to law school and then decided, you know what, I really would like to become a business transaction attorney.
And this is here we are. So I’m happy to answer your questions, Armando, and give some more insight to individuals that are looking to sell their businesses at this time.
Armando (3:41 – 4:05)
Fantastic. So Mei, when people come to you for the first time, maybe they’re talking with a prospective buyer and they’ve not been through this before. What are some of the common things that you find yourself telling them to help them understand what this process will look like, how it might play out, how long it might take, some of the pitfalls they might come across?
What are some of those common things that come up in those initial conversations?
May (4:06 – 7:26)
Sure. There’s a lot. It’s usually a good at least 30 minutes to an hour type conversation.
I’ll try to kind of summarize it for you, for us here. And then maybe we can go down a variety of alleys. But we really start with kind of what the motivation for the sale is.
Is it because somebody approached them with a potential for buying? Or is it because they are ready to retire, ready to go on to the next business adventure? A lot of entrepreneurs are serial entrepreneurs, or there’s some other motivating factors such as health or desire to move out of the state, for example.
That is the reason for the move. So understanding the motivation really helps because a lot of times the concern from buyers is, do we have a motivated seller? And if we don’t have a motivated seller, that will show up in the interactions and negotiations with the buyer.
Then after that, after we figure out the motivation, then we kind of talk about what is their timeline? Is it this year? Is it next year?
Is it sometime five, 10 years down the line? Or is it immediate? Meaning they got a buyer already who’s interested and they need legal assistance immediately.
Depending on where they are in the sale process will determine kind of the next step of conversation where we go. So if, for example, they are looking to plan to sell in some time in the future, it’s not immediate. They don’t have a buyer who just showed up at their doorstep or email.
We usually talk about a couple of things. One is, have they done the work they need to do to make the business attractive to a potential buyer? Which includes, for example, do they have all their contracts scanned in and saved?
Are they all signed? Do they have contracts? Have they looked at the anti-assignment provisions?
Can they assign it? Or do they have to go get consent from a lot of people? Maybe if they would get consent from a lot of people, we might want to consider trying to encourage some kind of ownership sales, stock or membership interest.
And we’re really focused on change of control provisions instead of anti-assignment provisions. Maybe it’d be easier to close if we didn’t have to go get all those consents. Then we look at who are the owners?
Are the owners one person? Is it multiple people, multiple generations? Or it could be employees who are minority owners.
We have to get their agreement to sell the business, potentially. Reviewing the governing documents. Are they all organized?
Do they have the necessary minutes if they’re a corporation? That’s kind of the corporate compliance piece. Then we also ask them about, okay, have they had other attorneys?
Have they ever dealt with another attorney? And explaining kind of what the legal process is just from a basic background. Then we go into, do they have an idea, a number in their head for valuation purposes?
In their head, they have a number. Have they checked that number with a financial advisor to determine if after taxes, is this number going to work for me for whatever reason, the motivation for selling?
[Speaker 3] (7:26 – 7:27)
Yeah.
May (7:28 – 8:22)
And then if they have a number, but they’ve never had it checked out, we would probably recommend they do. If they don’t know how they came up with the number, they just have a number. We might have to test it with evaluation.
Go get a third party valuation to give them some understanding. Could they go to the market and get that kind of number? Then who are they looking for to take on the business?
For these closely held businesses, a lot of it’s about legacy and they want to make sure that their employees are covered. Their business is going to be taken over by somebody who will appreciate, acknowledge, respect that legacy. And depending on who kind of buyer they’re looking for will also depend on whether they might need to get an intermediary, a business intermediary, business broker, investment banker, whatever you want to call them, another party to market their business for them.
I talked a lot, so I’m sure you have lots of questions, Armando.
Armando (8:22 – 9:37)
I do. So I made a couple of notes here to make sure to go back and ask questions, but I was so glad to hear how you started that about motivation. What is driving the motivation?
What is driving this owner, this seller to sell the business? Do they really want to sell it or not? And I imagine from what I see as a wealth manager over here, that people as they think about that sale and or retirement depends on where their mindset is.
That’s a very enormous decision for them to make. And sometimes, well, not sometimes, often, if not always, it’s a very emotional decision. So when they’ve nurtured this business for years, and now it’s time to let it go.
Yeah, the money is important. But as you said, they’re looking for legacy as well. Take care of the employees, take care of what they’ve built.
So the motivation can be critical for a successful exit in the mind of the seller, of the owner of that business. Are there things that maybe surprise you when you have that conversation motivation? Sometimes I’m sure it’s clear, but others, you may have to dig a little bit to bring that to surface to help them just emotionally deal with this whole sales process.
May (9:38 – 11:33)
Absolutely. Sometimes it’s not enough to just meet with the as the owner in the sense of the person running the day to day. Sometimes we have to meet not only with that person, but other stakeholders, a spouse, a child, maybe even one of their very, very close employees that is at the management level, because that person might be part of the legacy that the owner is trying to sell.
So we try to get the stakeholders into the same room. What we find sometimes surprising is not that they aren’t willing to sell, it’s more about willing to sell under their terms. And understanding the motivation will help us understand what kind of terms we need in order to get a deal done.
If it is, you know, this is my baby, I need to make sure I have and I’m retiring, I need to make sure I have enough money coming into my life, post-closing to in order to live the lifestyle I want. Sometimes you end up make you earn more just keeping the business and we call that a lifestyle business. And that might not be a good business to sell, because even if it has a management, you know, in there, they didn’t grow it to the level that they need in order to sell it for a purchase price that the owner is willing to live with.
The other part that comes up a lot of times with the motivation is they will tell me one thing. And then later on, as we discuss more in future conversation, it turns out there’s other things going on in their lives that they have yet to disclose. And that affects whether the motivation is sufficient to sell the business or we need to change the terms to satisfy those motivations.
[Speaker 4] (11:33 – 11:33)
Yeah.
May (11:33 – 11:47)
Other people will get into the business process and then go down that road and then realize, you know what, I don’t want to sell this business. I want to continue growing it. I’m going to take my business off the market, grow it and then come back to the market later.
Armando (11:49 – 12:11)
Yeah. And that makes sense. You know, maybe they’re not completely decided if they really want to exit.
And it seems like many times when when a business owner has that company, they’re not completely certain what they’ll do the day after the sale. And if they don’t have something in mind for what they want to do, it can make it very hard for them to let go of that company.
May (12:12 – 13:26)
Absolutely. We find that a lot of business owners, you know, they spent their entire life working for their business and they just haven’t they didn’t come up with a plan for what what they want to do. Now, the spouse who may not be in the business has a plan.
He or she usually does. Usually it’s a she, but we’ll just use they for the purpose of this. They usually have a plan.
And that usually means more time with the family vacation, things that are very foreign to this business owner who’s been going to the office every single day. I had one situation where the owner said, you know, I just I love going into work and talking to my employees. What I need is I need a desk.
I need an office. I want office hours, essentially, even though he’s not really doing any business. He just wants to visit.
It was a social time for him. He really enjoyed it. So that’s what we negotiated into the deal is he gets an office and he gets to have office hours with the employees.
And he’s enjoying it. Of course, he’s phased out of that, but he needed that in order to properly transition and get emotionally and be emotionally ready for the sale and for the post-closing lifestyle.
Armando (13:26 – 14:09)
Yeah. And it sounds like at the onset that would be kind of irrelevant, but it sounds like it was for that seller, for that owner, that sounds like it was really critical for him to emotionally kind of let go and go ahead and go forward with the sale. Well, good.
And what about you mentioned timeline as well? So may have someone is thinking, you know, they’re hearing about their friends selling their companies today and hearing they got, you know, X millions for their company. So in their own mind, they’re now beginning to wonder, should I sell?
When should I sell? At what point should they have a conversation with you? Let’s say they’re not ready to sell yet or not even, you know, they don’t have a buyer, but at what point should they really have a conversation with you so you can help them the most as they go through that process?
May (14:09 – 16:16)
The earlier, the better. There is no soon enough. If that thought of even selling or the thought of one day selling is not to their, I think we’ve been talking about a third party.
There’s also sales internally to key employees, to the children, including gifting. Those conversations, I’m sorry, those thoughts, if they’re starting to come into the owner’s mind, we should already be talking, essentially, because there’s a lot of things that we can prepare in anticipation of that, especially if they’re thinking of doing some estate planning and gifting some tax planning, advanced tax planning, as my tax colleagues like to call it. Those things usually need time to do before there’s a sale because the IRS may view it as too coincidental if you do it too close to the sale date.
So you try to get those gifting, those sales, especially with respect to key employees that are eventually going to take over the business, get those done sooner than later. If it’s a third party buyer, usually we see, we don’t usually see them come in soon enough. Usually what happens is they already have, they already found a buyer either because they showed up at the doorstep or they were working with an investment banker, a business intermediary, they brought in some buyers, they signed an NDA, a non-disclosure agreement, and the letter of intent is about to come any day or has already come.
That’s when we get the call if they’re not existing clients already. And then they say, okay, we need help with the sale because we don’t have a M&A attorney. And in that case, there’s a little bit of a learning curve because I know nothing about your business.
I haven’t been working with you to get your business ready. And I didn’t do any of your litigation or your transaction work, governance work. I’m kind of starting the same as the buyer.
I’m learning your business. And I’d rather not be in that situation if I could choose, but that happens more often than not.
Armando (16:16 – 17:22)
Yeah. I can see that. It sounds like if you’re going to be able to give that owner the best value that, and if they’re thinking, maybe even they’re kicking the tires with prospective buyers, it’s worth it for them to just give you a call, have a meeting with you.
You also mentioned preparedness or preparing for the sale. I’m making some notes here and looking at those notes, but you mentioned preparing. So if they’re thinking they’re doing some tire kicking, it sounds like it’s worthwhile to come see you.
And then you can help them in that preparedness. One thing that seems to happen quite a bit when someone is in a contract to sell their company, the due diligence is just such a burden when they’re trying to still run that company and get all these documents to the prospective buyer. But it seems like what you’re saying also is the sooner they see you, the sooner you can help them start getting those documents ready for sale.
If it’s the minutes of the corporation or anything that needs to get done, is that part of what you might give them guidance on as well? Yes.
May (17:24 – 19:07)
What we do is we kind of take a business inventory and figure out what do you have already? And is it organized? Buyers like to see an organized seller.
And if you’re not organized, you need to get organized. The business owners, they’ve been running the business day in, day out. They’re closely held, they’re family owned, might just be one person.
And they’ve just been making the decisions. They themselves make the decisions on a day to day. They don’t have to go ask anybody for that.
It’s not necessarily documented the way it needs to be documented. But a buyer is going to say, okay, do you have policies, procedures, structure in place that when I buy you, does the remaining employees, the management level know what to do without the owner there? Or is the owner essential to the business that might drive the value down?
Unless the business owner is willing to stay on for six months, a year, some kind of transition period to get that going. If we can prepare for the idea that you’re going to need to train, you need to promote somebody to know what you do owner. So that way when the buyer comes in, third party, usually they know they have a structure already in place to run the business and the buyers there to grow the business.
No, you do not have to have a perfect running business. That’s not the point. It’s just that you have a good growth model already in place.
You just need another person to grow it or the buyer, the seller is getting to an age where it doesn’t make sense for them to grow it. They just need to exit. They need to take some chips off the table.
That preparedness is very important.
Armando (19:08 – 19:49)
Okay. And you also mentioned that in just now about the value that driving down the value, if they don’t have some of those things in place. So in your experience and working with business owners who are selling, how much of a swing can that value be?
I mean, and part of why I asked this question is often business owners looking at the per hour price of the attorney and saying, I’m not going to call the attorney until I have to, because they’re going to charge me a lot for it. But no matter what your fee is, if they pay you that fee and you’re able to bump up that value by five or 10%, they’re way ahead by having done that ahead of time.
May (19:51 – 22:38)
Absolutely. I couldn’t tell you kind of a percentage, but I can tell you that there’s a lot of buyer money out there, but not a lot of good sellers. And so if you’re a good seller, you will get multiple offers, which will drive up the value.
If you are not a good seller, you may not have a buyer, or you may only have one buyer making it more difficult to drive up the value. I would say that I’m not the only one that can help the business owner maximize the value of their business. I’m on the legal side.
Yes, I can understand. You don’t want to spend legal time for business problems, for example. I might be able to point out some issues, but I’m not a business person.
I’m not an operator person. They might need to get a consultant to help them increase their revenues, decrease their costs. I’m not the right person to do that.
I might be able to kind of maybe point that out, but maybe a CPA could help, a business consultant could help fix some of those weaknesses to make the value of the business better. Another place that buyers really care about is the financials. So if you’ve only been doing internal financials, you have a bookkeeper, maybe you have an internal controller, but you don’t have an outside CPA doing your financials, that might be for, especially if you’re in the million dollar range for sale price, that might be a problem.
They want to see a sophisticated financial background. So I don’t, I’m not saying you go to the point, the business owner needs to go to the point of getting audits every year. Most small businesses don’t get audited, but having a external CPA, maybe review your financial statements.
And there’s lots of different levels of review that a outside CPA could do, but somebody else outside the organization that’s really helping with the financial statements, because most of the disputes after closing between buyers and sellers have to do with the, did the business properly, the business owner correctly indicate what their financial situation is. If they didn’t, they’ve claimed fraud, they can claim other reasons. You didn’t give me proper information.
I wouldn’t have bought this business had I known it was not performing that as well as you claimed it did in your financial statements. So I think that’s one area that, again, I’m not the CPA, I’m not the accountant, I’m not the financial person. They could use a lot of, they could definitely help the sale process and the value by having good financial statements.
Armando (22:39 – 22:59)
Yeah. And I think that the point you’re bringing out is having an independent third party gives the buyer more confidence in those numbers. And if there’s any kind of a pullback or earn out or anything that gets paid after the sale, rather than on day one, on the day of the sale, it could impact the owner’s ability to collect on that.
May (23:00 – 24:05)
Absolutely. And there’s something we call a true-up, very common in deals where they do purchase price adjustments after closing, where they’re looking at your actual numbers compared to your closing, the numbers that you estimated at closing. Other times they’re really looking at, you gave us your books, but not the recent ones because you were still working on them at the time of closing.
And so now we finish them up and we’re going to make sure that everything shrews up correctly. And so there’s that short period, but then there’s always that, what I call clawback period where they have a chance, maybe it’s one year, two years after the closing to see if there’s any problems. And if there’s problems, they might either offset it against the note that they agreed to pay you, the seller carryback note, or if they don’t have a note, they paid you all cash to get indemnification through the holdback escrow amount.
Or if there is holdback amount that gets sued or gets a demand letter, and then hopefully, and then likely a lawsuit if you don’t pay them, if you don’t pay the difference.
Armando (24:06 – 24:40)
Wow. So I’m so glad you began with motivation because it’s making me wonder as well. You said sometimes maybe the owner is looking for a price.
In their mind, they have a price they want to sell that company for. And when you are having the conversation with them about motivation, if the motivation or the goal is to get that price, and maybe the company really isn’t worth that price today, maybe they could work with that outside business consultant over the next one, two or three years to bring up the value so they can get the price that they want.
May (24:42 – 26:35)
Absolutely. And also a lot of these business owners, they think they know what the price is, but they don’t actually know. I mean, they probably talked to their friends.
They said, I sold my business for five times EBITDA or something like that. There’s usually some kind of rumor mill about value that the business owner then attaches to their own business. This happens even when home values, right?
I think my house is this. I go on Zillow. I think the Zillow says my house is this much, but in reality, it’s not really that much.
And so that has to be tested. So usually what I tell these business owners is first, okay, you have a number in mind. Great.
Let’s go to your wealth planner, such as yourself, investment advisor and say, if I were to get this price, is it really the price I need to retire? Or is it really the price I need to continue my lifestyle? If I can’t work, usually there’s a non-compete period.
You cannot do the business that you’ve been doing for the past 20 years for a period of time. Oftentimes that’s five years. And sometimes they’d be even longer.
So first test the value that they have in their mind first by saying, is it really even the number that gets them where they want to be? Then the second part of the test is you got to test it with somebody who values businesses for a living. Is this actually the price?
Is this something you can get? Sometimes you go get a third party appraisal. Other times you might meet with a business intermediary who has some understanding of the market, especially in that person, that business owner’s industry, and could say, given the industry at this time, if you were to market your business and given what your financials are, you probably are seeing a purchase price of in this range.
Does that range match what the owner wants and needs based on the modeling done by someone like you?
Armando (26:35 – 27:34)
Yeah. Yeah. And I’m glad you went where you went because your starting point again was for that business owner, for the seller of the company, they’ve got a certain lifestyle and they have a certain idea of what they want that lifestyle to be for the rest of their life.
And that means that after tax, after the sale is done, the after tax money they have that’s left, that that has to support that lifestyle for the duration of their life. And if that’s doable based on the price that is realistic, going back to that appraiser or maybe the investment banker, great. But if it’s not, maybe they’ve got to go back to that business consultant and work a little more, maybe combine with another company to get a bigger enterprise value, or just accept that it is what it is and accept that they won’t have that lifestyle anymore.
But as long as they know going in before they sign that contract, then the family is going to be better off after the sale.
May (27:35 – 27:37)
Right. A happy client makes us happy too.
Armando (27:38 – 28:03)
Right. Right. So you mentioned an organized seller.
An organized seller gets a better buyer or multiple buyers. Organized, when you’re saying organized, you mentioned financials by an outside third party. You mentioned maybe having all the corporate minutes up to date.
What other organization are you thinking of when you’re thinking of that organized seller?
May (28:04 – 32:34)
Sure. So are there processes in place? Meaning is there an HR person that has been doing the necessary checks on the employees?
Are the employees, have they signed either employment agreements, non-disclosure agreements, intellectual property assignments, if there’s intellectual property involved? Do they have incentives, compensation built in, especially the key ones to stay either through the sale process or post-sale? Are you anticipating maybe getting stay bonuses to these people that in one day, if they ever do sell, they will stay with the buyer for at least for a period of time in order to get the stay bonus.
So there’s a lot of planning you can do with employees. And there’s lots of representations and warranties in a purchase agreement. There will be often pages of representations and warranties.
Usually the bulk of the purchase agreement are the representation of warranties. And employees is a big one. They want to make sure that your ducks are lined up for employee issues, making sure that workers comp is in place.
There’s no immigration issues. Lots of employee issues can come up if you’re not prepared. And that’s part of the organization piece.
Another part place is intellectual property. Every company has some type of intellectual property, even if they don’t use, even if they are a service industry, they have intellectual property. They’re using some software, either they created it or they licensed from somebody.
Their name is intellectual property, their domain name, their website has intellectual property, trade secrets, things that are very specific to them. Are they really trade secrets or they’re just some type of proprietary information? Have they been keeping that secret or has that information been made available to others that was not intended?
And that might go to some of the employment agreements and restrictive covenant agreements that are in place. The insurance area, is there enough insurance to cover the things that they need to do? Is the insurance transferable in some fashion to the buyer?
Um, are you, do you have litigation claims sitting out there? Do you have potential claims, threatened claims that have yet to be resolved? That is a turnoff for a lot of buyers.
They want a clean business. So if you have existing litigation, get those, try to get those settled resolved before you go to market. So you can say there is no litigation or threat claims.
That would be the ideal situation. Real property, real estate. Are you leasing from a landlord or you, the owner through a separate entity owns the real property?
If it’s the owner who has a separate property, maybe you should enter into a arm’s length lease between the two entities because that lease will be assignable to the buyer. And if it’s just some kind of oral agreement, the buyer is going to try to dictate what the terms of that lease is going to be, as opposed to assignment of the existing lease. If it’s a lease with a third party landlord, there’s probably, are there options in there that are assignable to a future buyer?
Because the buyer might want to lock in the rental price with that landlord, that location. Sometimes landlord as the buyer already has an existing facility and has no desire for your facility. So you may not want to be locked in for too long because you will have to pay the business owner will have to pay for any termination of that lease if you’re not going to get out of it.
So there’s a lot of aspects of a business that could be planned. And you know, the answers to these questions ahead of time, because as you said, during the due diligence process, it takes a lot of time. I often tell my clients that it’s like a second job.
And maybe the owner is not the person, the right person to be doing the due diligence. Sometimes it is, but they might need to bring someone under the tent, one or more people under the tent to help them with the due diligence process. And the more organized you are up front, the easier it is for the owner and potentially other people under the tent to respond to the due diligence requests and also do what they call disclosure schedules.
Back to those concepts of the representations and warranties I said earlier, purchase agreements, lots of representation warranties. And there’s a lot of places where you might have to disclose something on a disclosure schedule. The more organized, the easier it is to do the due diligence piece and the disclosure schedule piece.
Armando (32:36 – 33:17)
Wow. Well, you said a lot with that. I’m glad you did, because I think that, you know, getting back to when the owner wants to engage the attorney, they want to wait till maybe they’ve already got a kind of a price in mind with a seller, then come to you as if all you’re really going to do is write up the sales contract.
When in fact, that’s not really what you’re doing. You’ve got to do a lot of homework and other things before you can get to that point where you write up the contract. And you have mentioned the reps and warranties.
Can you speak a little more to what that is and what that means?
May (33:18 – 33:26)
Sure. So a purchase agreement is kind of broken up into a couple of pieces that’s kind of easy. It’s the purchase price.
Armando (33:26 – 33:44)
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For more information, go to axiomcorp.com.
May (33:44 – 39:16)
Adjustments to the purchase price. What you’re actually buying is an asset as an ownership interest, assumed liability. Then again, the bulk is the representations and warranties, which is essentially saying, I am telling buyer that there are no problems with my business, except as disclosed in this section and in this disclosure schedules.
Then there’s another piece called covenants, which is I promise not to do X or I promise to do Y. I won’t compete for five years or I agree to hire your employees after upon closing those kind of covenants. Then there’s the indemnification piece.
That’s a little bit more of a legal lease side. And then, of course, there’s the miscellaneous boilerplate provisions. Going back to the representations and warranties where you are essentially selling.
These are all the things that are great about my business. These are the things that there are no problems with except for. So easy ones are, I own the business.
These are the owners of the business. These are the percentage interest. I have the authority to sell it.
The assets, if it’s an asset sale, are free and clear of any encumbrances or liens. That gets into another question. Do you have liens on your assets, on your business?
Maybe you have a line of credit. Maybe you bought some equipment, some capital leases. To the extent you’re going to do an asset sale and more likely also even if you’re doing a stock sale, an ownership sale, you’re going to pay those off at closing or before closing.
So anticipate that piece. Then you have to get some representative warranties about your financial statements, your tax return. Did you file tax returns?
Intellectual property. You own it or you have properly licensed it. All the employees will be there after closing.
Nobody’s given a termination notice or threatened to make any claims for harassment or any other employee claims. There’s a lot of them that’s possible. The insurance is in place.
The employee benefits, 401k plan, health insurance, dental insurance, they’re all in place. No problems. We’ve done what we need to do to comply with all the laws.
In fact, usually there’s a compliance with law provision says I’ve been given compliance. I represent a warrant that the company’s been in compliance with all laws, all times since I started the business. Then there’s of course pushback on knowledge qualifiers versus to the seller’s knowledge they’ve been in compliance or there’s materiality and material compliance laws and all material respects.
Those are places where the lawyer will negotiate with the buyer’s counsel over. But back to kind of the representation of warranties. Let’s say it’s litigation.
You say accept a set forth on schedule 5.4. There are no litigation outstanding or pending or threat to my knowledge. And then on that disclosure schedule, you have to indicate all the pending litigation claims and threats that you already have. But the essential statement is there are none.
And it’s your job to tell disclose to the buyer if there’s a problem. Of course, the buyer also has to give representation warranties. They have the authority to purchase the business, etc.
But usually their section is much smaller, much more limited and not as much negotiation on their side. But maybe theirs is like maybe one or two pages while yours is more of a 20 page side of representation. And you got to go through each sentence in those paragraphs to make sure you can actually give those representation warranties.
Because if you intentionally lie, that’s the bigger problem. So assuming you’re not going to intentionally lie, you accidentally misrepresent. You forgot about something because your business has been around for 20 years, right?
You forgot about it. And it turns out to be a problem after closing. The buyer can request indemnification, clawback for any damages caused by a breach of those representations and warranties.
Think about, I kind of use the example, when you buy a new car, they warrant that it’s not a lemon. And if it is, you go back and get a new car. Or if it’s just a problem, let’s say, the engine fails in the first year, that’s not supposed to happen.
Cars should be running for longer than the first year, but the engine fails, they will give you a new engine. And unlike in a business, they can’t kind of give you a new engine, but they have to pay you back for the cost of that new engine. And that’s, I’m sorry, my thing went, got me down here.
That’s the point of the representation warranties, is while the buyer does a lot of due diligence on the business of the seller, and arguably the sophisticated buyers will know more about your business than you do. But at the end of the day, there are some things they don’t know because history, the experience level, only the owner knows that, or the people running the managers, running the business will know that. And they need that quote, unquote reassurance.
And it’s an allocation of risk. Who should bear the risk if there’s something wrong with the company? Should it be the buyer or should it be the seller?
And that’s the purpose of the representations and warranties.
Armando (39:16 – 39:35)
And that makes sense. You said something about, you know, the company’s been around for 40 years. In the whole due diligence process, how far back, a company that’s been around 40 years, how far back should they really be looking to get things cleaned up in good order, et cetera?
May (39:36 – 40:45)
Well, some things last forever, but other things are more statute of limitations kind of things. So for example, whether you properly issued shares in your business, they should be able to look back all the way to day one when you started issuing shares, because they got to make sure that there was proper transfers on each step of the way to get you to the owner, if there were multiple transfers. For other things, usually maybe there’s a five year look back period, seven year look back period.
If you took out a PPP loan, which a lot of small businesses did, they might want to look back to whatever time period the PPP loan required you to give information. So they might actually look forward to six years. But a lot of these representations, you can put a time period on it.
The compliance of the laws, the buyer, you know, advocating for the buyer will want it for since you formed the business. Sometimes you can push back and say, look, it’s been around for 30, 40 years. We’re not going to rep that everything was fine for the past 34 years.
We’ll do it for the past five years.
[Speaker 3] (40:46 – 40:46)
Okay.
May (40:46 – 40:58)
Whatever is appropriate. You know, sometimes it’s even just asking the seller, when’s the last time you had really any big problems? Well, you know, seven years ago.
Okay. The past six years, everything has been great.
Armando (40:59 – 41:21)
Okay. And it sounds like, I’m glad you brought that point because it sounds like, you know, you can, you can, you can guide that process and put a thick line in the sand so that for the last six years, we’ll do, we’ll, we’ll, we’ll, we’ll accept that, but nothing beyond six years for any issues that were beyond six years. Exactly.
May (41:22 – 41:27)
Because if they were issues six years before, they probably would have already come up by now.
Armando (41:29 – 41:29)
Okay.
May (41:29 – 41:31)
That would be my argument as seller’s counsel.
Armando (41:32 – 42:03)
Okay. Well, that makes sense. That makes sense.
So what other, you also mentioned who are the, who are the owners and going back to, you know, where those thought certificates issued correctly on day one, even if it was 40 years ago. So I suppose you’re looking at whatever books and records they have in the office and whatever the state has on record, whatever those organization documents were on day one to make sure that you can trace the ownership from, from day one to today.
May (42:04 – 44:26)
Yes. So the idea would be, let’s say it’s a multi-generational family business. So there’s been, you know, grandpa and grandma started the business and they had four kids and they gave the business to their four kids when they passed away.
And then over time, one kid turned out to be probably the better business owner. And so he bought out his other siblings and became the owner. Were those transfers all documented properly?
Have they, have those kids, the siblings all been paid off or are there still money owed to them? Do they have any rights under any contracts that, that could come up at the time of the sale? Let’s say something in their contract says, yes, I’m willing to sell you my ownership interest now, but if you sell the business within X period of time, I get a, I call it a kicker, a percentage of the sale proceeds.
Because, you know, I was involved in growing the business after grandma and grandpa died, or I guess it’d be the parents, the parents died. And then, and then the grandson might be saying, Hey, look, I’m active in the business. I have an employment agreement here that says, you know, I get bonuses.
And in the event of a sale, I get a percentage of the, of the sale proceeds. Maybe they’re not true owners anymore, but they have some vested interest in the purchase price that we got to keep in mind. And then business owners love making promises.
Sometimes in writing, sometimes in emails, sometimes it’s just a casual conversation, but the, the, and usually it’s, it’s an employee that receives that promise and said, look, if you stay here for five years, or you stay here and grow this business with me, I’ll make sure I take care of you. If we ever sell, what does that mean? Does that mean I will make sure you get a bonus on my sale?
Is, does that mean you get to share in the purchase price? Does that mean I gave you ownership? What does that mean?
And we have to dig through that. We want to avoid the terminology is getting green mailed at the end of that time of closing saying, Oh, here’s the promise you made me. You need to live by that promise.
And then we’re, we’re slowed down or delayed in closing because we’ve got to deal with this person who’s claiming that they have some right to either approve the sale or some right to the proceeds of the sale.
Armando (44:27 – 45:01)
And so maybe what about, you mentioned timeline as well. What’s a normal timeline? You know, if, if things are ideal for you, someone comes to you, they’re thinking about selling and they tell you they want to sell not right away, but in the next year or two, and they come to you to ask you to help them prepare for that.
Once they actually go through some of that, that, that pre-planning process. And now they’re actually ready to sell from that point when they’re ready to sell. And now they’re looking for an active buyer in that.
How long does that sale typically take?
May (45:02 – 48:45)
So we usually say once the letter of intent is signed 60 to 90 days to, to sign and close usually. Sometimes there’s a period of time where you sign within 90 days and then you close 30 days after you sign, depending on maybe you have to go get some consents, but you want to be under contract for the sale. Other times it’s a simultaneous sign and close.
And that’s usually somewhere 69 days. Have we closed things faster? Absolutely.
Maybe the 30 to 45 day period, but usually buyer and seller have to be extremely motivated to get it done that quickly. And compromises have to be made in order to get it done that quickly. Last year, end of 2021, also end of 2020, a lot of motivating factors for trying to get it done within the calendar year, that calendar year.
And so both sides were very motivated, both buyers and sellers were motivated. We got to close before year end. And this time, December 31st is New Year’s Eve, whether the banks were going to be closed for wire transfers.
So that was a, that was part of our conversation. We sometimes close early, like maybe a day early, the 30th to avoid the rush of 30, 12, 31 closings, because there’s so many wire transfers going out. It might get missed.
So if you have a year end deadline like this, that can be a big motivator to get things done faster than your typical timeframe. But I tell most sellers that you’ve got to give yourself 60 to 90 days. Sometimes I would say even to go to market, that sale process could go 120, 180 days from the day you put it on market, because you just don’t know where the next buyer is going to come from and what kind of purchase price you’re going to get.
You might have to wait a little bit. You might sit on the market a little longer to get the purchase price. If you’re a clean, organized business, I don’t think you’re sitting around that long.
If you’ve got some cobwebs, you might sit, you must be sitting a little bit longer, waiting to sell the business. So somebody’s thinking, okay, I would like to sell in two years or next year. You’re, I would say, if you are saying you want to sell next year, you should be starting the process already to get these things done, because there’s a lot of, there’s, you need some runway to start planning for that.
Two years, maybe you can wait to start the really, really heavy stuff another year. Three years, it’s good to know that you want to do it, but you’re not going to put yourself on market hoping to close in three years. It’s just not going to happen.
But some of this cleanup stuff, especially if you’ve been ignoring what I call the administrative side of your business, you might need to get things, you might need to get started earlier on. And I kind of equate this to when you sell your house, more people have sold their houses than they’ve sold their business, right? Are you going to just sell the house as is?
Probably not if you want a good value, best value for your house, right? You probably need to do some maintenance in the house. You probably need to maybe do some painting.
You may have a, you know, a bigger issue with the house and you need to, you know, address that first. This market, you know, might need even more of a runway because of the materials are backlogged, right? So the, how much time you need to plan for it is a little bit maybe industry specific, business specific, how they’ve been running the business specific.
Then, and it’s kind of hard to tell, but the sooner they start planning, it can only help, it cannot hurt.
Armando (48:46 – 49:09)
Okay. And May, what are some of the common things that as you’re going through this, say the seller has a letter of intent, they’ve got that sign, then they call you up, Hey May, I’m going to sell my business, help me. And then, so now you see this for the first time, what are some of the common things that pop up that the business owner is surprised when you tell them that it’s, it’s got to be addressed?
May (49:11 – 50:37)
So I’m going to address the situation where they’ve gotten the letter of intent, but they haven’t signed it yet because they’ve already signed it. I would first ask them, did you get an NDA signed? If the answer is no, I would say we need to get that done because you should not be sending any of your financial information or business information to the other side until they’re under a non-disclosure agreement.
That’s the first thing I ask them. The second thing that becomes surprising is understanding what part of the letter of intent is binding and what part of it’s not binding. What can you enforce?
What can the buyer enforce? Usually there’s an exclusivity period that the buyer’s requesting because they’re spending time and money to analyze your business and they want to make sure you’re not out there marketing to find another buyer to compete with them. So there’s a lot of negotiation of how long is the exclusivity period?
Are there milestones to give the buyer more days in the exclusivity period? Usually buyers ask for somewhere between 30 to 90 days. 90 days is the most common for the due diligence period to work out for them to execute the purchase agreement.
And that might be a long time to be under exclusivity if this is not the buyer. Because even if you back out of the negotiation, you’re still under exclusivity and can’t go and market it or talk to any other buyers that may have come in in the meantime.
[Speaker 3] (50:38 – 50:38)
Wow.
May (50:40 – 51:16)
Another piece of the agreements that gets the LOI that sometimes surprise people is how much detail or lack of detail there is. Some letter of intents come in with a lot of marketing of what the buyer can do and with very little about what the business terms of the deal is going to be. We might want to address the hard issues first.
It’s a little bit like I equate the letter of intent as kind of getting engaged. Are you going to get engaged with the buyer before you know anything about the buyer or before you know what the marriage is potentially going to look like?
Armando (51:16 – 51:20)
Some people do that, Mae. And I don’t know if it works out, but some people do that.
May (51:20 – 52:42)
Some people do that and it works out fine and others do not. Most times it does not work out as well if they don’t know. For example, in a marriage situation, it might be good to talk about whether you both want to have children or not.
Some of these deal breakers probably should be addressed earlier on than not. And I try to say, use the letter of intent to deal with your deal breakers. If a deal breaker is you need to have that some kind of, how to put it, legacy preservation, whether that’s the name of the company or certain employees are going to get jobs after this for a certain period of time, it might be a good idea to put in the letter of intent.
So that way everybody knows up front, these are deal breakers. They’re non-negotiables. They need to be part of the deal.
And if you can’t make that happen, then we don’t have a deal. We don’t have that exclusivity period. And sometimes the letter of intent comes back very detailed and they’re like, well, is all of this, are we agreeing now to agree to all of this before we kind of get down to learning more about each other?
And it goes, no, but it’s the framework. And if you go outside of the framework too much, there could be an argument that you’re not negotiating good faith.
Armando (52:42 – 52:43)
That sounds like a prenup.
May (52:44 – 55:45)
It’s a little bit like a prenup, a little bit like a prenup. You know, the prenup lets you know what happens if there is a divorce, right? And I usually don’t like to use the word prenup for when businesses are trying to get together.
So that’s why I always talk about, okay, yes, you have a contract, but we always got to know what happens if there’s problems. And that’s where the prenup would come in is what happens if there’s a divorce? What are the rights of the parties?
And maybe the letter of intent isn’t quite the right vehicle for that piece. The purchase agreement for sure is that right vehicle, but the letter of intent is really saying, okay, we got to know what the deal looks like. We should at least agree on what the price is going to be.
And oftentimes the buyer will hedge it and say, this is the price subject to our financial due diligence. Let me add a curve to your timeline thing that we just talked about. Lots of buyers are using, are doing what they call quality of earnings, Q of E for short.
This Q of E usually is done by an outside CPA firm and quality of earnings because of the increased M&A activity has had a longer lead time. So that might affect how fast a buyer can close because they usually want to get the Q of E done to make sure this financially works for the buyer. And it’s a double check on your financial statements and your financial information that you provided.
And that could create more questions. And then you have to go back to the Q of E people and make sure it all works out. It’s got to all pencil out for these buyers, right?
They’re usually buying, especially for private equity groups. They really need to justify to the investors that this is the right deal to do. The other element that kind of goes along with this piece and the timeline piece is representations of warranties insurance or RWI, we call it for short.
A lot of buyers are coming in offering representations of warranties insurance as a way to, it’s part of the package that might make them a more attractive buyer, especially if it’s a really clean, organized, competitive seller. Buyers will come in and say, yeah, we can do it. Closing faster because we have, we’re going to get represent warranties insurance or represent warranties insurance.
It’s essentially back to that representation warranties. We were talking about all those pages. The pages are still there, but the idea is if they’re buyer purchase representations and warranties insurance, the holdback, the money that they may put into an extra account to maybe deal with any potential problems that they learned about post-closing is usually smaller.
And the, if there is a problem, it’s only going to be the insurance deductible. And no more. After they hit that, you’re not going to be, the seller is not going to be liable anymore.
They can go to sleep at night. No problems. But if sellers really like it, especially since it’s a, buyers pay for it and it reduces their, it reduces the seller’s exposure, their risk.
Armando (55:45 – 55:48)
Like a warranty on a house almost.
May (55:48 – 57:39)
Yes, a little bit like that, but even, I mean, it is an insurance product. So it has exceptions, just like your homeowner’s insurance. It doesn’t cover fraud for example.
And there’s terms just like it’s an insurance policy that the buyer buys out for any problems that could happen to cover them. So you’re not necessarily the direct beneficiary of it, but as an indirect beneficiary, you have better terms for liability in your purchase agreement. And the good thing about the Reps and Warranties insurance is that sellers love it.
Buyers use it as a negotiating tool to get really good sellers. But the problem is, similar to the QV area, because of that increased M&A activity, there’s, there’s a backlog to do the underwriting necessary for the Reps and Warranties insurance, which could also further delay the sale process if they have to go through that due diligence process. Usually they kind of do it simultaneously with the buyer, but sometimes not.
And it depends on if the buyer has a good relationship, especially with the PE group, they have a really good relationship with the insurance company that’s going to provide it, or they’ve done it multiple times. They know what they need to do. They understand the issue spotting, things like that.
And they can do it quickly and they can promise it quickly, because they know there’s more business coming from this buyer. If it’s a first time buyer, it might be more difficult to get the Reps and Warranties insurance. Not all deals have it.
Some deals are too small to get Representations and Warranties, although that market has been growing. And I think I just attended a COE a couple weeks ago, where they were talking about for deals under 15 million, they have a type of Representation and Warranty policies that these insurance companies are not selling.
Armando (57:41 – 57:47)
Wow. You’ve mentioned a lot. Any key points that we haven’t talked about, May, so far?
May (57:49 – 1:04:41)
I want to talk a little bit about the non-disclosure agreement. I really think that before any discussions with any buyer goes to the point of providing paperwork documents to the other side, that a non-disclosure agreement needs to be signed by the parties. It can be mutual, it can be one-sided, just depends on the situation.
It could be the buyer’s form. It could be seller has a form ready for, they’re planning for a sale, so they already have a form. It could be the investment banker’s form, but an NDA, something to put in place to make sure that the buyer’s not going to take that information and use it against the seller, especially in a competitive fashion.
A lot of times there’s strategic buyers, they’re competitors in the business. And usually the strategic buyers are the ones that will pay the higher value, the price, than a private equity group, because the strategic buyer sees more value in adding it to their existing business model, as opposed to just a portfolio business. So you’re going to give your competitors all your secrets?
No. Now, at the same time, you don’t have to give them everything that they asked for. You can space it out.
Some information they need in the beginning to even figure out if they’re going to give you a letter of intent. Okay. But do they really need to know all your employees first and last name and full?
No, they do not, unless they’re planning to go poach them. You can wait to give that information. You just give them an employee number, right?
If they need to know how many employees, you just tell them how many employees there are. You don’t need to give them the full employee census. They might want to see your contracts.
Well, some of the contracts might have non-disclosure provisions in it. So you gotta be careful about what contracts you disclose to the other side. And you may not want to, especially your most important ones, you might not want to share the price that you were able to negotiate with the vendor, especially that vendor is also doing business with that buyer.
So the NDA is very important to get in place as soon as possible. If once the business process, the sale process starts going and information is being exchanged, even before there’s a letter of intent is presented. The other piece I kind of want to talk about is getting your team together.
I kind of mentioned a bunch of different people that could be resources for the business owner. And I kind of want to summarize that here, which would be, yes, you need an attorney, not just your general practitioner attorney, not the attorney you go to for employment issues or litigation issues. You need an experienced M&A attorney because you might be leaving things on the table without that person.
And the buyer will appreciate and acknowledge, there’s a greater chance of knowledge that you are ready, willing and able seller. If you have counsel that is an M&A counsel, not your general practitioner. Then a CPA, an account, it could be somebody, you could have a CFO type, be that person for you.
But again, as I said, it’s usually good to have a third party CPA firm that might have some M&A experience because there’s going to be M&A questions about closing working capital, that calculation, that’s very complicated. And if it’s CPAs never even seen a transaction like that, they might not understand the nuances of that. And remember, seller’s got to pay taxes on the purchase price.
And you want to reduce, the seller usually wants to reduce, minimize how much taxes they have to pay. And a good M&A CPA might be able to achieve that, help them with that. Banker, well, the banker part comes in because usually these businesses have lines of credit.
They usually have loans out for a variety of things and they have to get paid off. And you need to get the banker on the same side as the seller to be motivated, to get the information we need, to get payoff letters, get release of guarantors, things that needs to get done in order to close and give the representation that everything is free and clear of all these encumbrances. The wealth planner, the investor, the, what do I call it?
Financial advisor, like yourself, Armando. Yes, they’re going to work with you, work with the seller post-closing with the money generated, the sale proceeds. But again, as I indicated earlier, there’s a lot of planning you could do about how is the price right for that person?
Do you need to change your lifestyle to do that? What are your investment possibilities? Is this the right time to sell, get the sale proceeds, invest in whatever they want to invest in?
Real estate, the stock market, have a client invest in some cars, things like that. Different things that a seller may want to do that the investment banker says, wait, hold up. I’m sorry, the wealth manager might say, no, hold on.
Then the business intermediary, some kind of investment banker. If the buyer, if the seller doesn’t already know who potentially could buy their business, that might be where you might need to go and get some more information on who the potential buyers are there. You might, the seller might not know who could potentially buy them.
But sometimes they do. They might actually know who the potential buyer could be, and they don’t need the investment banker. The investment banker not only helps you with the sale though, they also help with the sale process and do something to help with some of the, I would call market negotiations with the buyer and the buyer.
And so there is some value there. If the question is, do they bring you the value you want for the commission they are requiring at the end of a sale? And that is on a case by case basis.
Then the insurance advisor, you might need to get tail policies for your insurance policies. You might need to figure out how to cancel those policies. Sometimes buyers want you to transfer the policies over.
Are they transferable? A lot of times they are not. And then last but not least is who’s going to be under the tent in the business.
Is it going to just be the owner or is it going to be the owner and the controller, the owner of the controller, the HR person, who’s going to be under the tent and make sure that they understand then one, they’re not going to leave while we’re still doing the sale process. Two, what’s the incentive for them to help the buyer to do this and then sell, then go to a seller. And they can also be very helpful in testing out the buyer because they have to work with the buyer.
The owner doesn’t usually. Is this going to be the right fit culturally? Because the culture is a big, big factor on how successful the M&A transaction is post-closing.
Armando (1:04:41 – 1:06:43)
Well, you said a lot that you said, getting the team together, M&A attorney, don’t get the normal business attorney or you’re the one who helped with the purchase of the real estate or anything else because as with many types of professions, people specialize and M&A attorney specializes in the buying and selling of businesses. So getting that M&A attorney, getting the CPA who also understands buys and sells. You mentioned working capital and clearly defining what does that formula look like so that the seller is in the best position and knows what he or she is getting into.
The banker as well, there might be loans on that business that have to get paid off before the sale and get closure on those. The financial advisor to look at really what’s left after the sale and how’s that going to lead that family from that point for the rest of their life. The investment banker that might need to be part as well, who, as you said, if the seller already has a buyer in mind, maybe not as important, but if they don’t, the investment banker can bring potential buyers to the table and help negotiate and walk through that process with them and the insurance advisor.
So I’m glad that you mentioned all those as part of a team. And as you also said, who’s under the tent? Who’s helping the seller?
Is it just the seller only or the seller and a key person? But who really needs to be aware of this transaction, this potential sale, and who’s going to help that come to closure? So all those are very important.
I was going to ask you as well, before I even brought that up, about the investment banker or the intermediary or the broker. Do you see them often? Is it over a certain price threshold for the sale of the business?
You as the M&A attorney, how do you work with them or interface with the investment banker to help that seller get to closure on that business?
May (1:06:45 – 1:09:10)
Sure. I see a business intermediary can be involved at any size of business. The question is more the type of business being sold and the amounts depending will dictate what level of business intermediary that you need.
There’s a lot of businesses that fall under what we call Main Street. And those, the people, the business intermediaries are usually called business brokers. They usually, those little type of businesses, regardless of price, but the buyer, sorry, the seller has an idea what the price is.
They already know what they want the price and they list it, kind of like you list a house. You list it on bizbysell.com and you wait for the buyers who are looking to buy these businesses, these type of businesses. A lot of times they’re restaurants, retail, salons, car washes.
They tend to be the Main Street world. Then we go into the lower middle market, middle market, the middle, middle market. Those people may list them very rarely.
They’re usually, they go out and try to find the buyer and there’s not a price attached. They have, we have an idea of what the price should be, but we wait for the buyer to tell us what the price is. And that’s also true for the upper middle market, as well as what I call the investment banker world where it’s, you know, the billions.
They don’t list the price when they tell people that there’s a business for sale. They actively go look for potential buyers that might be interested in the industry and just interested in that type of business. And the buyer comes up with the price.
Does that price match what the seller wants? Hopefully. Sometimes it doesn’t.
And then we go back to the drawing board. But so from all levels, you could have a business intermediary involved. I would say usually the thing that dictates whether someone goes and uses a intermediary is whether they want to kind of have an auction, multiple buyers and try to drive up the price.
If they do, you’re going to usually have to go with some kind of business intermediary. Most buyers, most sellers don’t have the capacity to run an auction like that.
[Speaker 3] (1:09:11 – 1:09:11)
Wow.
May (1:09:11 – 1:09:34)
Another situation where you might want a business intermediary is you really don’t know who the potential buyer is. And they’re usually maybe outside of the state. So that’s why you don’t know them or you’re looking for private equity.
Most sellers don’t have, they don’t know who private equity is out there. And you usually need a business intermediary that has access to that world to bring that kind of buyer to you.
Armando (1:09:35 – 1:09:48)
Wow. Well, Mae, you’ve covered a lot. If somebody, and thank you for that.
If somebody is wondering how to get in touch with you, what’s the best way for them to reach out to you and have a conversation with you?
May (1:09:48 – 1:10:39)
Sure. I answer email and phone. So mlu at tvlaw.com.
T as in Tiffany and B as in Bosco, law.com. Or my phone number, direct line 602-255-6032. If you don’t get me, you can always speak to my assistant, Carla Frederick and, and go from there.
But sometimes people just want to send me a quick email. Usually in order to have a more fulsome conversation, we have to run what they call internal conflict check. Confidential, of course, just to make sure that there are, there’s no potential conflicts with any of our existing or former clients before we can actually have a more fulsome conversation.
If it’s just a really, just a quick question, I’d be happy to answer any really quick questions, but if you’re going to tell me about your business, I will have to run a conflict check before we can have that conversation.
Armando (1:10:40 – 1:11:09)
Yep. And that makes sense. Thank you for mentioning that.
Well, Mae, again, this has been just fantastic. Thank you so much for the information. I hope that there’s a person out there or a couple out there who’s thinking of selling their, their, their business that listens and learned a lot from the conversation and that they know they can reach out to you if they have other questions.
So Mae, thank you again. So we will, we will, you know, hopefully get some folks in front of you who really need your help and you can help guide them through this process.
May (1:11:10 – 1:11:15)
Of course. Thank you so much, Armando. It was really a pleasure talking about the sale process with you.
Armando (1:11:15 – 1:11:18)
Yep. Same here. Great.
Well, have a good afternoon then.
May (1:11:18 – 1:11:19)
Thank you. You too.
Armando (1:11:20 – 1:11:56)
Hope you enjoyed this episode of the Founder’s Guidepost, whether exit is on your immediate horizon or maybe 10 years down the road, there’s something here for you. And remember, we all have an expiration date. We just don’t know when that will be, which is why planning ahead is critical.
And if you’re wondering if you’ve missed anything in your planning, contact me to schedule your founder’s strategy call. You may call our office at 480-367-9000 or schedule a call at axiomcorp.com. Here’s to your American success story.
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