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Waterfall Structure

Waterfall structure refers to the order in which a private equity fund pays out distributions after investments have been liquidated. The traditional waterfall structure entails having the limited (Read on)

Past Terms: GP CommitmentOverall Fund PeriodPrivate Equity Investment Period

How to Structure the Right Investment Banking Engagement Letter

If you need an investment banking engagement letter, you need to know what to include and how to word it. Here are the critical terms of agreement you should have in your letter so both parties are looked after.
The Four Main Reasons Acquisitions Fail

You've successfully completed an acquisition, but will this business thrive under your care? Here are four main reasons why acquisitions fail and what you can do to avoid them.
The Value of a Valuation

The best valuations cover all the basis. Are you getting the best? Find out what nuances are often overlooked in a business valuation and take steps today to avoid these pitfalls.
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.
The Only Valuation Method that Really Matters

There are many ways to do a business valuation, but is it the right one? For most buyers, there's only one business valuation that matters: theirs. Learn how to tailor your valuations to your buyer's preferences.
If You're Selling Your Company, Don't Get Sandbagged

A seller needs to understand what a sandbag clause is in a purchase and sale agreement, and how to spot specific language to make the agreement seller-friendly.
9 Critical Areas for Effective Due Diligence

This is part 2 of a two part article that discusses what constitutes an effective operations due diligence and nine critical areas of focus.
Who Will Buy My Company?

The right way to find the best buyer for your company when you are ready to sell. Develop the ultimate strategy to source and choose the right buyer for you.
Should My Accountant Do My Business Valuation?

Your accountant is willing to do the valuation of your business, but should you be willing to let them? Here are some of the main reasons why your accountant might not be your best fit.
When Selling Your Business, Don't Waste a Buyer's Time

When selling your business, you will inevitably be asked the question: Why are you selling your business? You and your team need to have a solid and consistent answer to this question. This article explains how and why.
Excessive or Expected Costs: What SG&A Can Tell You About Your Business

Expenses are a normal cost of doing business, but how much is too much? Are you overpaying on taxes because you are unsure how to manage your expenses in order to increase your profit? Read on for more.
Key Ingredients to Making M&A Brand Decisions

There are many factors to consider when finalizing the resulting new brand (or re-branding) from a merger and acquisition. This article overviews the key items you need to think about before moving forward.
The Top 10 EBITDA Adjustments to Make Before Selling a Business

Investment bankers conduct a comprehensive review of historical numbers to show a company in the best financial position possible when it's up for sale. Learn the most common adjustments to EBITDA so you can look for them yourself.
Master Ten Value Drivers to Sell Your Business at the Highest Price

When it comes time to sell your business, you need to master these 10 value drivers to give yourself the best position possible in today's market. Challenge your method of thinking by learning to assess your business the way a potential buyer would.
What Role Does Your Brand Play in a Successful M&A?

Brand strength and value is often overlooked during a merger and acquisition. However, brands carry a lot of value and influence how successful your M&A will be in the long run. Learn what you need to know here.
So You Received a Letter of Intent, Now What?

You've worked hard to position your business for the sale and finally received a letter of intent. Understanding what this letter truly says is vital and this article will detail what it means.
Building Value Is the Win-Win-Win of Exit Planning

The best way to build value for your business sale is to make sure you, the business owner, are not an integral part of the sale. Distancing yourself from the business through exit planning is key. Learn how here.
Exits Are Inevitable; Failure Is Not

Don't let yourself get so caught up in your business that you forget the critical step of exit planning. You've developed a successful business, so don't let your inevitable exit be a failure. Start planning now.
What Is a Platform Acquisition?

Building your business through acquisition (either as the acquiree or acquirer) is a sound strategy. Use established businesses as a platform to bolster your industry presence. This article will show you how and why.
The Basics of Mezzanine Financing

A mezzanine structure allows an acquirer to reduce the cost of capital and boost returns on equity.
Top Excuses Owners Use to Avoid Exit Planning

You will rationalize reasons to stay involved in your business until you've missed your golden opportunity to do so. If anything in this article rings true for you, consider your reasons for staying in. It might be time to start planning your exit!
Deal Flow Options and the Single Family Office Investor

Which is the best acquisition strategy? From co-investment to buy side advisors, John Bova takes you through the gamut of options, including their benefits and drawbacks, so you can make a more informed decision when you decide to invest.
EBITDA Engineering Before Selling a Business

Take control of your financial statement by learning how accounting policies can positively impact EBITDA.
Maintaining Confidentiality Versus Maximizing Price

Making sure that your sensitive information is kept secret during the sales process is important, but so is ensuring that those bidding for your business have an idea of the true value of it so you get the best deal possible.
How Business Sales Are Best Strategized, Conducted and Consummated

This article follows-up on the Divestopedia article 'When Selling Your Business, What Sale Process Is Best?' with a focus on the often undervalued step of ensuring you select the right advisor.
Prepare Early to Close Faster (and Better!)

While we know the importance of due diligence during a sale, did you know that doing it before you enter the sales process can give you a competitive edge and therefore help you net more funds? Here's how to do it!
Business Succession: Is an MBO or Employee Share Ownership Plan Right for You?

So you want to sell your business, but you have a dilemma: who do you sell to? This article shows how your well-trained staff can take over and continue to successfully run your business instead of approaching the sales market.
Why Retiring Business Owners Balk at the Idea of Selling Their Company

Every owner has their own retirement process. Some are vying to get out, but many have second thoughts -- are they ready? What comes next? This article overviews options that may help you with your exit planning.
What Is My Electronic Manufacturing Business Worth?

Figuring out what your electronic manufacturing business is worth is an important first step to entering the market. This article details the best valuation approaches and recent market trends to compare against.
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Deal sourcing refers to the process through which financiers such as investment bankers, private equity firms, family offices, business owners, strategic buyers and Read more

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
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