- Go public: Expensive, size matters and sophistication is off the charts. Good for a liquidity event.
- Sell to competitor: Not rewarding to your employees and often does not feel good to anyone. Likely, the owner will need to be involved for a few years to maximize your earn-out.
- Sell to strategic buyer: Usually the price is better than selling to a controlled group, but your culture will change and your management team and their respective roles will be diluted over time.
- While you get a large lump-sum up front, you will likely need to stick around to earn your strategic purchase.
- Partner with a private equity partner/financial sponsor: Often a good option so you can take some chips off the table (lessen your risk), maintain some control, formalize business process and decision-making authority and you can build in an exit and pre-defined valuation for your remaining interest. On the other hand, you now have a financial partner with built-in expectations.
- Part management buy-out and part ESOP: Your legacy will be sustained and built upon in the years to come. Your involvement and ongoing leadership and guidance will be important so you will need “time and patience” to transition the process. The trick will be how best to finance such a multi-tiered transition and at what value?
Bob Coen
CEO
Coen is the CEO at BCI Group, Inc. where he consults with companies seeking to grow or transition their business through defined shareholder objectives, management structuring, performance … Read full bio
