Two major challenges face entrepreneurs and investors in a privately-held business with more than $5 million in revenue.
Challenge 1: Knowing how exitable the company is.
Challenge 2: Determining the optimal time for an exit.
Deciding to sell all or part of a company is a complex decision given the broad variety of business factors that must be taken into consideration. Adding to these factors are the interests, needs, and concerns of various stakeholders consisting of co-owners, investors, customers, employees (and their families), and the community.
Knowing if the company is ready and able to access the Private Capital Markets is a key determinant for deciding if an exit is viable and prudent at this stage of the company’s lifecycle. If the company can access the Private Capital Markets with a reasonable likelihood of successfully attracting the interest of multiple financial and strategic buyers, then the field of qualified buyers significantly expands. This expanded field opens up the potential for creating a competitive deal environment with multiple parties bidding for the company through an auction process.
The company gains leverage simply by being able to access the Private Capital Markets even if an auction process is not actually used. The option to take the company to market via an auction helps ensure that negotiations with a buyer via an arranged marriage or a preemptive bid stays on course and remains above board.
ExitGrade simplifies this complex environment by boiling everything down to a single number from 1 to 9. The higher your ExitGrade, the greater the likelihood of successfully engaging the Private Capital Markets.