At the latest Dealmakers M&A Conference in Boston, MA, Christopher Riley sponsored a panel discussion on how to mentally and financially prepare entrepreneurs for a business exit.
Joined by the great Twelve Points team in Boston, Riley navigated through choppy waters on how preparing entrepreneurs for an exit isn't always an easy endeavor. Riley, CEO of United Cutwater and Cutwater Capital Advisors, does more than growing businesses to an optimum value and then exiting them to a strategic buyer. Riley also does exit advisory coaching with business owners and key leaders to ensure that all issues are resolved prior to a business exit.
The smaller the company, the more issues that tend to need attention. However, even bigger companies have family issues, former spouses and business items that owners traditionally don't like to discuss with due diligence teams. Riley, also a private investigator and seminar trainer, helps to resolved these issues before they become a stumbling block at closing. As a trainer and coach for multiple seminar and coaching organizations, Riley works with the owner(s) on their mental and emotional state approaching a transaction.
Separation anxiety is real when an entrepreneur sells his/her business. What to do next is always an interesting journey. This is where the wealth management firms and advisors are so important because they should have addressed a lot of this years prior to the sale. Riley talked about charitable foundations that can be set up ahead of time and save the owners significant dollars upon exit in capital gains taxes and eventual estate taxes.
The other key components to how United Cutwater exits businesses is that they actually come in years prior with their operations consulting team made up of business owners and experienced consultants, and begin building a strategic growth plan to turn the business into the most acquisition attractive entity for the buyer. They do this by thinking like the buying entity. Then, they bring investment capital and pay for the improvements while seamlessly resolving all the issues that investment bankers usually have trying to pull all the right information front and center upon marketing the company.
United Cutwater works with multiple strategic partners in their Equity Revitalization platform. Estate tax attorneys, wealth managers, CPAs and business attorneys are all plugged into the detailed project management GANTT chart so that the exit is as smooth and lucrative as possible. The end result is:
A buyer gets a thriving and growing business to inherit and continue to grow
The business owners pocket 20% to 40% more exit dollars, some capital gains tax free
The business owners are transitioned to their next phase in life where they get to start making a difference in the areas in which they are passionate, and grow their legacy that is one of the most important long-term goals for most entrepreneurs - In the end, it isn't the money, it is the journey and the difference that they made and left begin for their personal legacy.