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Summary of: What Privacy, Security, and Compliance Documentation Will Acquirers Expect? In this article, well outline the key privacy, security, and compliance documentation that buyers especially private equity firms and strategic acquirers expect to see during due diligence.
E285: How to Sell a Business in Puerto Rico (Without Losing Your Mind or Millions) - Watch Here About the Guest: Francisco Uriarte is Managing Partner at Connelly Capital, a Puerto Rico-based M&A advisory firm. Working capital traps are real – Mismanaging receivables, payables, or inventory can silently kill your valuation.
As one of the most active M&A firms in the insurance sector, we are frequently asked how insurance agency valuations work. This article discusses the fundamentals of insurance agency valuations, plus a few lesser-known factors that play into these processes before we give an overview of the insurance M&A market in 2024.
A Strategic Guide for Founders and CEOs For software founders contemplating a sale, the question of valuation is often the firstand most complexhurdle. Understanding the Core Valuation Framework At its core, software company valuation is typically based on a multiple of earnings or revenue. What is my software company worth?
In the world of mergers and acquisitions, the Confidential Information Memorandum (CIM) is more than just a document its your companys first impression to serious buyers. For software and technology founders considering a sale, the CIM is a strategic asset that can shape buyer perception, drive valuation, and accelerate deal momentum.
Summary of: M&A Advisory for SaaS Businesses Under $50 Million: Strategic Considerations for Founders For founders of SaaS companies generating under $50 million in revenue or enterprise value, the M&A landscape presents both opportunity and complexity.
Insurance agency valuation is a critical component of running an M&A deal, but executing this multi-step process well requires a great deal of specialized education and experience. In addition, getting the valuation process started demands a hefty bill and entails poring over extensive documentation for several weeks.
If your product incorporates open-source components especially if youve fine-tuned or modified them its critical to understand the licensing implications and how they may affect your valuation, deal structure, or even deal viability. Map Licenses to Usage For each component, document: The license type (MIT, GPL, etc.) Heres how: 1.
Owners in the manufacturing, construction, and technology industries often want to secure the highest possible valuation while maintaining a smooth, confidential process. This often necessitates more comprehensive preparation and advanced business valuation services to gauge the true worth of your company. Others opt for a clean break.
But in nearly all cases, the quality and clarity of your financial documentation will directly impact valuation, deal structure, and buyer confidence. What Financial Documentation Are You Overlooking? A well-documented EBITDA bridge can materially impact valuation. Here are several that should be on your radar: 1.
The following article discusses how to value a Registered Investment Advisory firm (RIA) prior to taking it to market. Who Performs A Valuation? Self-representation can lead to inaccurate valuations that give sellers a false sense of how much their company is worth.
Summary of: How to Share Proprietary Code and Technical Documents with a Potential AcquirerWithout Losing Your Trade Secrets For founders and CEOs of software companies, few moments are as strategically delicate as sharing proprietary source code and technical documentation with a potential acquirer.
Defining Your Level of Involvement Decide if you want to be hands-on in operations or prefer an advisory role. In an advisory role, you will provide financial backing and strategic guidance without being involved in daily management. Transparent communication is essential to establishing trust.
This article presents a step-by-step guide on how to value an insurance agency - both in the sense of how a valuation agency/M&A advisor goes about valuation, and also in terms of what insurance agency owners can do to maximize their valuation prior to running an M&A deal.
A professional valuation will provide vital insight into where your business fits in the broader industry and global e-commerce market. Secure a Professional M&A Advisor From the initial valuation inquiry through closing, a good M&A advisor or broker simplifies the process of selling an e-commerce business.
Step 2: Conduct a Comprehensive Business Valuation Understanding the actual value of your business is crucial for a successful sale. A comprehensive business valuation involves assessing tangible and intangible assets, market conditions, and future growth potential.
But with the right preparation and advisory support, the timeline can be managed strategically to align with your goals whether thats maximizing valuation, minimizing disruption, or closing before year-end. Due Diligence & Closing (23 months): Legal, financial, and technical diligence, followed by final documentation and closing.
A Strategic Guide to Valuation For software founders and CEOs, few questions carry more weight than: What is my software company worth? Whether you're contemplating a full exit, raising growth capital, or simply planning ahead, understanding your companys valuation is foundational to making informed strategic decisions.
Your answers will shape the deal structure, buyer pool, and valuation expectations. As we noted in EBITDA Multiples for SaaS Companies , valuation trends fluctuate with investor sentiment, interest rates, and sector performance. These are critical for SaaS valuations. Often used to bridge valuation gaps. Or exit entirely?
On the other hand, economic downturns may lower business valuations but could also present opportunities for strategic buyers looking for bargains. Due Diligence and Documentation Due diligence is a critical phase in any business sale. Economic indicators such as GDP growth, inflation, and interest rates provide a crucial context.
And it certainly does not stop less-than-reputable advisory firms from agreeing to represent you and taking their regular retainer fees, despite knowing full well your agency can’t be sold. What Documents Do I Need? Beyond proof of sustained profitability when analyzing these documents, look for: Liquid Assets. Manageable Debt.
This article explores the key frameworks, valuation methods, and strategic considerations for assessing the worth of your software IP whether its proprietary code, algorithms, patents, or data assets. Why IP Valuation Matters in Software M&A In traditional industries, valuation often centers on tangible assets and cash flow.
A term sheet is a document that outlines the terms of a proposed transaction. Often similar to an indication of interest (IOI) or a letter of intent (LOI), a term sheet serves as a basis for initial negotiations on critical issues like the target company’s valuation and the structure of the prospective deal. What is a Term Sheet?
Are you optimizing for valuation, cultural fit, or speed? This allows time to optimize financials, clean up operations, and position the business for premium valuation. Understand What Your Company Is Worth Valuation is both art and science. Do you want to stay on post-sale or transition out quickly? Timing also matters.
In this article, well unpack the key valuation drivers, explore current market multiples, and offer practical steps to help you assess and enhance the value of your software business. Understanding the Core Valuation Framework At its core, the valuation of a software company is typically based on a multiple of earnings or revenue.
Whether you're responding to inbound interest, planning a strategic exit, or exploring liquidity options, the process requires careful orchestration from valuation and positioning to buyer outreach and deal structuring. A well-prepared company signals professionalism and reduces perceived risk both of which drive valuation.
They prepare a business valuation (which tells you what the company is worth), market your business to buyers, facilitate meetings between your management and the buyers’, negotiate with finalists, manage the rigorous due diligence process, and coordinate with the rest of your team.
For founders and CEOs, understanding the role of due diligence is essential to both maximizing valuation and ensuring a smooth transaction. But for sellers, its also a chance to demonstrate operational maturity, reduce perceived risk, and justify premium valuation multiples. Compliance: Are data privacy policies (e.g.,
Business Valuation: Understand and obtain a professional valuation or estimate to understand the worth of your technology business. Running a compresensive and targeted M&A auction process will help to maximize the outcome including receiving multiple offers and driving valuation higher. Solganick & Co.
Valuation For a more in-depth examination of the valuation process, consult our previous article on the subject here. Once an agency owner completes their initial preparations, the next step is to complete a full valuation of the agency. Valuation is a process in and of itself. Account-Based.
A closing binder (also called a closing book) is a comprehensive, organized collection of all final, executed documents related to the acquisition. What You Need Ready Before Closing By the time you reach the closing table, most of the heavy lifting due diligence, negotiation, and documentation should be complete.
In our experience advising software and SaaS companies at iMerge, weve seen how certain pitfallsoften overlooked in the early stagescan materially impact valuation, deal structure, and even the likelihood of closing. In reality, buyersespecially private equity firms and strategic acquirersexpect a well-documented, diligence-ready business.
Changes in the Valuation Process Valuation is the first formal step in the M&A deal process, taking place once the seller has gathered all their preliminary documents and made any necessary changes to the company's internal structure to make it more profitable. Family-specific financial arrangements.
Yet, many founders and CEOs underestimate just how central IP clarity is to valuation, buyer confidence, and deal execution. Similarly, revenue-sharing or white-label agreements may give third parties partial rights to your IP, which can complicate valuation and post-acquisition integration.
M&A deals involve intricate details concerning financial regulation, due diligence, valuation, and negotiation. An M&A advisor is an authority on valuation norms within your industry. It ensures that any valuation they put forth is robust, defensible, and aligned with the prevailing winds of market transactions.
Whether you're fielding inbound interest or proactively exploring a sale, this guide outlines the key considerations, valuation dynamics, and strategic steps to position your tech startup for a successful exit in the $3M$50M range. Strategic fit If your product fills a critical gap for the buyer, valuation may exceed financial norms.
This article outlines the key tax and legal documents you should be prepared to manage after selling your software or technology business, with a focus on the months following the transaction close. Recordkeeping and Audit Preparedness Even after the deal closes, you should retain all transaction-related documents for at least seven years.
Pre-LOI (Letter of Intent): Keep It Confidential During early-stage discussions exploratory calls, data room prep, or initial valuation modeling its generally best to limit knowledge of the process to a small, need-to-know circle. Due diligence intensifies, legal documents are drafted, and integration planning may begin.
essentially boils down to three major steps: Determine your insurance agency’s EBITDA Determine the standard valuation multiple for an agency of your size Multiply your EBITDA by the multiple to determine your expected payout (i.e.,
Data Collection: Gather relevant data and documents, such as financial statements, legal filings, operational reports, and market analyses: Collect historical and current financial statements, including balance sheets, income statements, and cash flow statements. Financial risks: credit risk, liquidity risk, market risk, and valuation issues.
Any stock-for-stock combination of two companies with relatively similar valuations is typically referred to as a merger of equals transaction, and even some stock-for-stock acquisitions where the “acquirer” is valued significantly higher than the “target” share some key elements of a merger of equals transaction. 2.
As we noted in Legal Documents Required to Sell a SaaS Business , these representations can carry significant post-closing liability if inaccurate. With the right advisory team, you can navigate these hurdles confidently and keep your deal on track.
Even after months of diligence, negotiation, and documentation, the final 5% of the deal often requires 50% of the effort. Founders navigating valuation or deal structuring decisions can benefit from iMerges experience in software and tech exits reach out for guidance tailored to your situation.
A good case study of why it’s essential to be mindful of who you sell to and the equity you give up can be seen in the following story: In 2006 Greg Alexander founded Sales Benchmark Index (SBI) a growth advisory firm. For example, get your financial records in order and have a business valuation done through an independent consultant.
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