Term of the Day

Multiple of EBITDA

Multiple of EBITDA, or EBITDA multiple, is used to determine the potential value of a company. This computation can be used by an investor who plans to acquire another company. However, some financial... (Read on)

Past Terms: Break-up FeeAdd-On AcquisitionClub Deal

Why Your M&A Advisor Should Use Online Deal Sourcing

There are some common objections about online deal sourcing, but it is an important tool for completing middle market M&A transactions. Here we debunk the four most common objections to online platforms.
How to Avoid Lowball Offers When Selling Your Company

It's important to have a plan to find the right kind of buyers when selling your company in order to avoid lowball offers and wasting your time. Learn what to avoid and what you should be doing to make sure you're potential buyer list is high quality.
Valuing the Growth Rate in the Sale of a Technology Company

David Kauppi from MidMarket Capital calculates an adjustment factor for valuations between publicly traded and privately held companies, such as the technology industry, in order to present a more accurate accounting for differences in growth rate.
Evolutionary Capital: Supporting Second Stage Companies and Their Leaders

"Evolutionary capital" fits somewhere between venture capital and private equity in the second stage of a company’s growth. Although, only 1-2% of all such companies experience sustained growth at this stage, Evolution Capital explains a proven approach.
How an Unbelievable Financial Forecast Can be Just That: Unbelievable

Preparing a financial forecast is a key step to selling a business. However, most projections don't pass the credibility test. Here are some of their common flaws and how to correct them in order to make them believable for buyers.
5 Tall Tales Entrepreneurs Tell to Bolster Business Value

Business owners come up with all kinds of stories to support an unrealistically high value for their business. The problem is, most of these tales are pure fantasy.
How to Retain Key Employees During a Sale Process

If not managed properly, poor deal team engagement can harm your sale price, or worse, kill your deal. Learn how to motivate your key employees in order to support the successful sale of your business.
3 Keys to Success for Your Management Buyout

MBOs are risky, but can be mutually rewarding when done right. Learn the three key areas to focus on in order to improve the probability of success for your management buyout.
10 Impediments to Maximizing Exit Opportunities

There are a multitude of issues that could derail the sale of a business. In this podcast, we explore 10 impediments that can reduce the chances of successfully selling a business.
How Would a Private Equity Firm Value Your Company?

Hadley Capital, a private equity firm, explains how they would value your business for sale. Learn about the methods used and what to expect in the sale process.
10 Ways to Attract Private Equity

Private equity can be an excellent exit alternative for many mid-market business. Learn 10 ways to be more attractive to a private equity investor.
Valuation vs. Value Creation

Private equity group, Evolution Capital, explains the difference between a business valuation and value creation, as well as how both affect the other.
Spring Clean Your Revenue First, Then Grow It

Not all revenue is created equal. Valuable companies focus on revenue that is high margin and repeatable to maximize their value.
How Your Balance Sheet Impacts Business Value

A balance sheet is one of the most common starting places for buyers when attempting to assess the value of your company. Learn which line items may impact the value of your business the most.
EBIT or EBITDA? Sometimes the DA in EBITDA Really Does Matter

Cashflow metrics, like EBITDA, EBIT and FCF, are often thrown around interchangeably. But there can be big differences in each of these numbers, especially when valuing a company.
4 Steps to Partnering with a Private Equity Firm

Thinking of selling your business to a private equity firm? Get an overview from Hadley Capital of the steps you'll be taking and how only 1% of businesses actually make it to closing.
Private Equity Basics For Mid-market Entrepreneurs

Private equity buyers can be a great exit option for many middle market business owners. In this podcast, learn the basics of private equity and how to attract investment from these groups.
Acquisition Growth Strategies for Middle Market Companies

Podcast with John Bly, author of "Cracking the Code: An Entrepreneur’s Guide to Growing Your Business Through Mergers and Acquisitions for Pennies On The Dollar."
Empire Builders' Tips to Acquiring Mid-market Businesses

Empire builders have the desire, capability and charisma to build $100M+ companies. For those that have the risk appetite to take on such dedicated acquisition programs, here are some common characteristics of successful empire builders.
Seven Paradoxes of Middle Market M&A

For over 25 years, Rob Slee has seen hundreds of people fail to earn a living in the M&A industry. Learn these 7 paradoxes he says their misunderstanding were the cause to failure, and ensure a higher success rate for your next deal.
Do Advisory Boards Increase Business Value?

One of the most important elements of a great investment is getting the right people involved. Learn the elements of a great advisory board and how to create your own.
What CEOs Wish They'd Known Before Hiring an Investment Banker

Finding the right investment bank may be a once-in-a-lifetime decision that sums up your life's work. Consider this advice from successful business owners who've hired one before you do.
Finding the Right Investment Bank to Sell Your Business

Though you may have interacted with investment banks before, hiring the right one for a transaction that can represent the summation of your life’s work may be a once-in-a-lifetime decision. Learn how to choose the right one to fit your needs.
How Selling to Private Equity Worked for Me

In this Q&A, we learn from an entrepreneur who built his business from scratch, grew it the old fashioned way by taking care of his customers and employees, and finally partnered with the right private equity-backed platform company.
What Would You Like Your Business Value to Be?

There are a number of different applicable valuation concepts depending on the specific situation. Learn which concept is most appropriate when.
The #1 Reason Business Sellers Leave Chips on the Table

We asked seasoned exit planning professionals how to avoid leaving wealth behind when selling a company. Their answers educated and inspired us.
How Does Working Capital Impact the Value of Your Business?

Working capital is a contentious issue over the course of a transaction as the buyer and seller will often have divergent views. If it's not positioned properly, a business owner may sell at a discount, not even realizing money left on the table.
Acquisition Synergies (An Automotive Aftermarket Case Study)

Consolidation in the entire automotive aftermarket industry will likely continue due to both financial and strategic components. Here's how identifying synergies plays a part in the consideration of such acquisitions.
Kids Taking Over the Business? 8 Things to Consider

Transferring ownership of a business is difficult. Transferring it to a family member makes it even more complicated. Here are eight things to know about transferring your business to your kids.
Like Rodney Dangerfield, Earnouts Just Don't Get Any Respect

No one seems to like earnouts. Why? Are they evil traps invented by buyers ... or are they just misunderstood? Let's take a look behind the bad rap.
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Fixed charge coverage ratio (FCCR) measures whether an organization has the ability to pay its fixed expenses such as tax, interest and lease payments. This is a... Read more

The Securities Exchange Act of 1934 is legislation passed by the United States Congress that empowered the Securities and Exchange Commission (SEC) with broad... Read more

An irrevocable proxy is a type of proxy that cannot be revoked for a specific period of time. Though most proxies are revocable, some can be made irrevocable with... Read more

Normalization is a financial process where any nonrecurring expense or income is removed from financial calculations, such as EBITDA. The idea behind normalization... Read more

Equity method is an approach used for accounting a company that has invested in another company’s securities or stocks. It must be noted, though, that this... Read more
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