Term of the Day

Institutional Strip

An institutional strip refers to the total capital provided by private equity investors to facilitate leveraged buyout. When a private equity company acquires a target company, they first must create a (Read on)

Past Terms: Buyer BrokersUnicornBuyout

Business Valuation: An Analysis of Risk

In valuing a business, an appraiser must analyze every aspect and quantify his/her analysis of the company’s risk into value. George Abraham of Business Evaluation Systems details 9 key risk factors to be considered in the appraisal of your business.
Increase Your Company Debt? Why Not, It May Be an Option to Selling

For companies with low debt on their balance sheets, leveraging back to an optimal capital structure can allow an owner to monetize the business - without selling.
'Best of Breed': An Aggressive Valuation Strategy for the Best Mid-Market Businesses

The best companies can't always be compared to their peers. That's where the best of breed strategy comes in. Find out how it's used in IPOs - and how those lessons can be applied to mid-market businesses.
11 Reasons to Use Earnouts in the Sale of Your Company (Part 2)

Dave Kauppi, M&A advisor with MidMarket Capital, Inc., gives five more reasons out of 11 why earnouts should be considered when selling your technology (or other) company.
11 Reasons to Use Earnouts in the Sale of Your Company (Part 1)

Sellers have historically viewed earnouts with suspicion as a way for buyers to get control of their companies cheaply. However, here are the first six of 11 reasons why earnouts should be considered when selling your technology (or other) company.
Diversifying Without Selling Your Business

Business owners often have all their wealth tied up in their business. But diversifying doesn't have to involve selling - or even giving up control.
Top 10 Buzzwords to Use When Talking to Private Equity

The use of these 10 buzzwords is music to private equity investors' ears. Just be sure to back them up with facts.
Venture Capital Alternative for the IT Entrepreneur

MidMarket Capital, Inc. explains their "smart equity" model and how it can serve both small entrepreneurial firms looking for an investment with the appropriate growth partner, and large industry players looking to enhance their new product strategy.
For High-Tech M&A, Strategic Value is Not Automatic

Dave Kauppi, president of MidMarket Capital, Inc., describes his recent experience in helping a health care information system company get the best value when selling to a strategic buyer.
6 Key Components of the Entrepreneurial Operating System

Entrepreneurs looking to streamline their processes will want to listen to this latest Divestopedia podcast with our guest, Mike Paton, who explains the 6 key components of the Entrepreneurial Operating System and how to implement EOS in your business.
Mezzanine Financing and Investing Explained

Mezzanine financing may be a great way for growing businesses to bridge the gap between what conventional banks will lend against assets and the total value of a new project/acquisition. Investing in such debt may also be worth adding to your portfolio.
What to Expect After Closing a Private Equity Deal (Part 3)

Paul Wormley from Hadley Capital continues his candid discussion of what to expect when you close a private equity deal in this third and final part of the article series.
What to Expect After Closing a Private Equity Deal (Part 2)

In continuing this candid series by Hadley Capital, Paul Wormley discusses more specifics about what a business owner can expect to change once a deal closes with a private equity group in part two of this three-part series here.
What to Expect After Closing a Private Equity Deal (Part 1)

Most business owners are more concerned about closing a deal than what exactly happens after the documents are signed. Paul Wormley, partner at Hadley Capital, explains what changes to expect as soon as the ink dries.
Positioning a Business for a Merger or Acquisition (Part 3)

Read more for what you should be doing before you go to market with your business in this final of the three-part article by Jim Grebey, president of Diligent Inc.
Positioning a Business for a Merger or Acquisition (Part 2)

Read more for what you should be doing before you go to market with your business in this second of the three-part article by Jim Grebey, president of Diligent Inc.
Positioning a Business for a Merger or Acquisition (Part 1)

Selling a business requires considerable strategic planning and preparation. Learn what you should be doing before you go to market in part one of this three-part series by Jim Grebey, president of Diligent Inc.
In a Business Sale, the Buyer Has the Upper Hand (Part 3)

This is part three of a three-part series from Dave Kauppi, M&A advisor with MidMarket Capital, Inc., that identifies the natural advantages that business buyers bring to the table before the transaction process even starts.
In a Business Sale, the Buyer Has the Upper Hand (Part 2)

Dave Kauppi, M&A advisor with MidMarket Capital, Inc., identifies buyer attacks on the transaction value of your business during the negotiation and LOI process, and approaches you can use to hold your ground.
In a Business Sale, the Buyer Has the Upper Hand (Part 1)

Unless your company is one of those "must-haves" with buyers crawling all over you, you are subject to a process that greatly favors the business buyer. This is part one of three of how the buyer already has the upper hand in the sale process.
How Middle Market Business Acquisitions Are Financed

Understand the basic financing structures used in the sale and acquisition of a lower mid-market business.
Ask an Expert: 5 Questions on Non-Disclosure Agreements (NDAs)

Ever heard of NDAs? If you are looking to sell or buy a business, you may have been required to sign one. Here are 5 questions you always wanted to ask about them, but were afraid to.
Good Companies Don't Get Sold, They Get Bought

Ready to sell your business? Before you put the "For Sale" sign up, learn what steps you should be taking first.
The #1 Cause of Middle Market M&A Deal Failures

Dave Kauppi, advisor with MidMarket Capital Advisors, Inc., explains how the end of a deal could have been avoided at the beginning with the letter of intent. Learn what you should do differently in your next deal.
Surprises to Watch Out for When Selling a Business

Even if you’re smart enough to plan for every eventuality, selling your business is going to be full of surprises. Here are things that caught me off-guard on my maiden M&A voyage.
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.
View All

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
View All

Connect with us

Divestopedia on Linkedin
Divestopedia on Linkedin
Tweat cdn.divestopedia.com
"Divestopedia" on Twitter


'@Divestopedia'
Sign up for Divestopedia's Free Newsletter!

Email Newsletter

Join thousands of others with our weekly newsletter