Maximizing your company

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While that relationship may well havebeen affected, another importantf area that has been impacted has been privatr institutional investment – in particular, the eagernessw of private equity funds to entet into transactions, and the valuationn that an institutional investor might assign to a This is because private equity firme often augment their equity investmeng with bank debt in order to maximize the returnw to their shareholders. If credit conditionsd make it more difficult for these firms to raise deals areless common, with the ultimatde result of a lower valuationj for a company if a transaction is beingg contemplated.
If owners or management of any companyg are anticipating a saleor capital-raising event of this type at some how can they ensure that the valuatioh is a favorable as possible? A few suggestions: For the company should have a robust shareholder’s agreement. This is a very basic, but key, part of any corporater documents. It addresses issues such as ownership, the rules governing salese of shares, composition of the board of directora andother matters. A corporate attorney with experienc e in addressing these specific matters shoulddraft it.
If you have not had competent counse l review thesedocuments recently, it wouls be money well spent: An ounce of preventioh here can mitigate huge problems later. Any law firm with a busines law practice should be able to assisyt in a matter such as It should go without sayingg that if your accounting records are in poor it will be extremely hard to supporr any sort ofattractive valuation. In fact, in this many firms will simply pass on a deal where the financial recordsare suspect. This is simply because there are enougyh other deals out there where this is not an issue that an investo will just move on tothosed deals.
Any company that has any reaso to believe that it will be looking to raise outsidedcapital – debt or equity should have appropriate accounting controls and procedures in If the company does not possess the internal expertisw to implement these controls, any competent CPA firm shoul be able to assist. As an end management should look to put in place a procesxs that results in auditedfinancial statements. If managemen t can articulate and defend how the companuy will achieve its growth goals for the next couplesof years, it will have a majofr impact on valuation. This includes concrete sales goals, executabl plans to achieve those goals and infrastructurew rollout tosupport growth.
Even thoug growth right now mightbe minimal, if management can credibly demonstrater how it will address this issue, it can make a very significantg difference in how the company is viewed by an outside By preemptively addressing these management seeking outside investment can make their companu more attractive and help supporft a more compelling valuation from the perspective of all