Do you know where to find a 10x exit? 

Step 1: Exit Canvas 

Our process starts with our proprietary Exit Canvas, a facilitation and documentation tool that summarizes your business for the purpose of creating an acquisition strategy. Throughout our engagement  we will revisit this document to adjust our assumptions.

The Exit Canvas initiates a shift in the perspective you hold of your firm, you’ll begin to look at your firm through the eyes of an acquirer and not through the role of founder focused on operational issues.

Step 2: Create prospect pool

Next we'll undertake the task of compiling a roster of potential acquirers based on their acquisition strategies. Beginning with our comprehensive list of acquisition strategies, we'll arrange the strategies in descending order of likelihood.

Each acquisition strategy will then be populated with potential acquirers. Some lists will be easy to generate while others will be more challenging. With this approach, we aim to construct an exhaustive list that aligns the acquisition worthy elements of your firm with the strategic objectives of potential acquirers.

Step 3: Market the deal

We'll leverage our marketing channels to showcase your firm to the ideal audience. Our strategy involves precisely targeting firms identified from the prospect pool. But we'll also promote the opportunity to acquire your firm to a broad list of potential buyers.

Our goal is to extend beyond the initial list of names we created, ensuring comprehensive exposure for your firm. Ideally we’ll have 12-15 (or more!) potential acquirers show interest and request the teaser document.

Step 4: Send the teaser

The teaser is the first information that is shared with a potential acquirer about your firm. Its goal is to pique the interest of buyers in order to get an NDA signed and continue the process.

At the time the teaser is sent we will not be under an NDA so we’ll only share information that won’t help your competition if our teaser document finds its way to them. We share basics about your business like service lines, revenue, profitability, headcount, locations, etc. 

Step 5: Prepare the confidential information memorandum

The confidential information memorandum, or CIM for short, is a ~20 page document that contains comprehensive information about your firm.  When this document is sent, we’ll be under an NDA. So we’ll share with potential acquirers all the information they need to put together an offer for your firm.

We won’t share any trade secrets in this document (like customer names) but we will do our best to share as much as possible. Our goal is to paint an accurate picture of the company, not an overly optimistic fairy tale. From our experience, selling too much at this stage leads to offers that will fall apart at later stages.

Step 6: Receive the letter of intent

The letter of intent (LOI) is a non-binding letter that an acquirer uses to make you an offer.  The acquirer will use the information you’ve previously supplied to prepare their offer. 

The LOI will outline the total value of the company, what percentage of the company they seek to buy, the employment agreements they expect to offer, the earnout timeframes and amounts, and any relevant terms to the deal, etc.  The letter of intent is the written document that you will use to initiate negotiations.  

Step 7: Prepare the data room

The data room is where you store all the information that will be needed during due diligence.  This includes financial statements, tax returns, customer contracts, employment agreements, leases, etc.    

From the seller’s perspective, this is a heavy lift and should be started as soon as possible. The buyer is going to ask for documentation for every minute detail about your firm, some of which you haven’t thought about in years. The better the due diligence is prepared for and executed the higher your chances of selling. 

Step 8: Due Diligence

Due diligence is probably the most important part of the process when selling your firm.  Due diligence from the buyer’s perspective is about learning as much as possible about the firm in order to convince themselves to close the deal, or to not do the transaction. 

Due diligence should take between 30-90 days. As the seller it’s to your advantage to make this go as quickly and efficiently as possible. The longer the due diligence process continues on the more likely the deal is to be renegotiated. Another very common outcome from due diligence is that it lasts so long that the business results suffer and the acquirer has another reason to renegotiate.

Step 9: Close

If everything is looking good coming out of due diligence, we're going to engage an M&A attorney 4-6 weeks before the closing date.  While you might already have a contract attorney for your normal business matters, it’s advisable to invest in a good M&A attorney.  The M&A legal team is going to help with legal and tax related matters for the transaction and it’s worth hiring a legal team that has industry relevant experience.