In every business, created from scratch, sooner or later there is a need to attract additional capital, the Commission of various transactions in shares between the partners in partial or complete sale of the company to an external investor. The key question — whether to engage a financial consultant, or as fashionable now to speak of the adviser, for such transactions? What tasks designed to solve the consultant? Will the consultant more efficient use of resources of the business and whether the same tasks to solve on their own?
The answers to these and other questions depend on a number of factors, including the type and complexity of the deal, your experience, long-term goals. These issues are particularly relevant for small companies, developing start-UPS with limited financial resources.Why you need a financial Advisor?
The network of fuel stations, regional plant for the production of soft drinks, a network of urban eateries, existing almost more than a year fitness-startup — as well as their owners, others better understand the essence of the business, competitors and market realities? Moreover, the owners are interested in maximum efficiency of your company, investing every earned ruble in its development, and following the rule of "not spent ruble — the ruble earned."
When it comes to strategic decision in respect of the company, whether the acquisition of a competitor, the involvement of the partner or a complete sale of the company, the owner has to solve many tasks at a time that the transaction was successful. And while under analysis, negotiations and a decision that the business must continue to function effectively and stay under control. Usually its work the financial Advisor begins with the fact that together with the entrepreneur draws a complete picture of the upcoming transaction, it examines the various risks and difficulties, as well as conducting analysis of the parameters of the transaction (including price) for the formation of realistic expectations on the timing of its implementation and structure. Particularly important in transactions on raising capital or selling a business is to prepare the company to dialogue with investors. Often, the leadership and employees of the holding of such transactions is not daily practice, and they simply do not have enough experience for developing an appropriate strategy interacting with these counterparties, and even if they have attracted competent counsel. In life there are many examples of profitable deals quickly collapsed under negotiation due to the lack of understanding between the company and the investor.
Before the start of active interaction with contractors, the consultant will mobilise all internal resources of the company: conducts a number of preparatory meetings with key staff, determines the command to interact with the investor forms a single line presentation businesses. Under the deal, the consultant will supervise the whole process of dialogue and will only provide this communication, which is beneficial to you and your business. To form a unified face of the company — not an easy task.
Often in the process of selling or attracting investors can participate several contractors (competitive process maximizes the price), and the consultant's task is coordination of all participants and processes, control of the information provided, as well as maintaining maximum competition among investors through informal dialogue.
During negotiations the consultant's experience in deal structure often allows to bring together the differing negotiating positions of the buyer and seller. Regardless of whether you buy or sell a business, the consultant can easily play the role of bad COP and tested in the framework of negotiations favorable terms of the transaction — you can always take a step back in the negotiations and to lay all the "blame" for your consultant, if you feel that the proposals create a risk for the transaction.DIY?
Before starting the transaction, the owners of the company can collect key employees and to jointly develop a detailed step-by-step plan of the transaction. Without a doubt, the team that created and operated business, will be able to form a unified position with regard to the process, attract a range of investors through its connections, to deal with the legal intricacies of the transaction and, based on their business experience to recommend the owner to make a particular deal. Such a transaction may take longer to be attractive, but not the most effective. A key condition for the success of this event is complete coincidence of interests of hired managers and owners. And this, as proven by numerous scientific studies and confirmed by many examples from practice, it is impossible without special motivational tools (options, bonuses per trade, "Golden parachute", etc.).
Managers and employees can have a number of reasons why they can sabotage the implementation of the transaction from a simple misunderstanding of your business goals, ignorance of the fundamentals of the processes of interaction and negotiation with investors to more selfish motives — for example, lack of monetary motivation, the rejection of the new owner or investor fear of losing his position after the transaction in the case of the arrival of a strong and progressive team. Quite often there are cases when employees consciously and openly let the deal — all new people afraid.
That is why business owners usually observe a special regime of confidentiality of the transaction and communicate it to a very limited circle of people. This step allows you to minimize internal excitement within the company about possible changes. The consultant in this design acts and "working hands", and "single window" for interaction with counterparties.
In addition to benefit for you, the consultant also has significant benefits for the management of the company and its employees — process communication with external partners is fully structured, all employees understand that when they need to do, to say, to disclose to the investor, no distractions from the main job responsibilities with endless requests for information, comments, need to attend meetings, and overtime. Without experience you will have is difficult — savvy investors simply tortured references to "market practices for similar processes," the volume of requests, the pressure in the negotiations.
Without a doubt, the consultant expands the horizons for your business. For many investors the presence of a consultant in the transaction is itself a "sign of quality" the organization of the process and confidence in the seriousness of your intentions. The consultant is always in the market and has significant additional information that may affect the decision on the transaction to identify the pearl among the items for purchase, find the investor who will offer the best conditions. As advised recently in "the Secret" founder of Wheely Anton Chirkunov: "...the Creator of any business you must first be able to count money, plan and make financial forecasts to sell your company to investors and partners..." you can Always learn from their mistakes, but it's usually more expensive.
What is the value created by consultants and how much to pay for services? It is important to understand that all consultants are interested in building long-term relationships and strive to be the first or only consultant in future transactions — it can be used. The standard scheme of obtaining compensation for the consultant on the deal is a reward for the success of the project. The size of this fee can be tied to the size of the deal, citing a consultant to maximize selling price or to minimize the purchase price of the asset. Long term relationship with a counselor can also be reported through the joint participation of the consultant in the business — that is what most Internet startups in the modern world, interacting with business accelerators. Benefits from such cooperation can be created for many future years.
In the case when the prospects of the deal are not clear or it is necessary to conduct a limited analysis of the market, form a strategy for a particular product, the consultant will prefer fixed level of compensation. However, the consultants were less interested in such projects — they are only indirectly related to the maximization of business value.
The consultant is always possible to save money, but it is important to remember that his work is always unique practical experience. And who knows — maybe after five or ten joint transactions, you can become an independent consultant for their company. published
P. S. And remember, only by changing their consumption — together we change the world! ©