Monument Resource Center
Our clients hire us because they recognize the value of our Team’s unique, straight-forward, unfiltered opinion and our tailored advice designed to answer their questions, not everyone else’s. Below, you’ll find some of the most important questions we have been asked over the years to help you better understand the role we play and the advice we give.
As a successful professional selling or exiting your business, selecting the most appropriate strategy for you is critical for achieving not just your potential for wealth, but your potential for living.
Below is a brief introduction to 10 strategies you could be asked to consider.
1. Strategic (Industry) Buyer
Strategic buyers often pay the highest price, however, may restructure the acquired company.
2. Financial Buyer (Via a Leveraged Buyout – LBO)
Strategic buyers often pay the highest price, however, may restructure the acquired company. Loans are typically used in financing the acquisition.
3. Management Buyout (MBO)
Family members and/or a group of current managers raise capital or debt to acquire the company.
4. Employee Stock Ownership Program (ESOP)
This regulated alternative allows the business owner to sell all or part of the company to a trust, which generally borrows money in order to affect the transaction.
5. Leveraged Recapitalization
The company borrows money and buys back shares from the owner (akin to a share buyback program offered by public companies from time to time).
6. Sale to a Foreign Investor
Foreign groups may acquire minority or majority share in U.S. firms. Typically, investors are firms linked to the U.S. company’s industry or supply chain.
7. Private Initial Public Offering (IPO) or Private Placement of Equity
Investment firms can be used to facilitate the acquisition of successful private or family-owned companies through organizing private (Accredited) purchasers.
8. Restructuring to Generate Liquidity to Buy Back Shares
In an effort to avoid dilution of ownership, other methods can be used to generate liquidity to buy back outstanding shares. These measures include facility consolidation, asset sales, or other means.
9. Estate Planning Transition Plans
With prior planning, owners can take advantage of a number of trust and estate alternatives for the gradual transfer of the firm to new shareholders (usually family members).
10. Taking the Company Public (IPO)
Using company stock in public markets creates immediate liquidity for shares sold.
WHICH STRATEGY IS RIGHT FOR YOU?
Familiarizing yourself with this list of potential exit strategies is just the start of formulating your strategic exit plan. You can spend your remaining days clicking through thousands of ages of advice, but what you need is clarity—to understand why it’s worth considering one option over another. And there is simply no substitute for sitting down with people who know how to listen and help co-create a plan that’s yours and yours alone.
The Monument Wealth Management Team specializes in working with business owners who are planning to exit their business. Holding your long-term goals as our focus, we can work with your trusted business exit team (likely a Mergers & Acquisitions Advisor, Investment Banker, Trust and Estate Attorney, Deal Attorney, CPA, and Wealth Manager), to help guide you through a successful business exit.
Visit our website at monumentwealthmanagement.com to learn about our Private Wealth Designs for business owners.
10 Business Exit Planning Strategies
The Monument Wealth Management Team specializes in working with business owners who are planning to exit their business.
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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument.
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