Should You Sell Your Company To An Independent Sponsor?

Finding a Buyer
Written By Mike Simpson

With increased M&A activity focused on buyouts of private, owner-led businesses, the numbers and types of buyers has increased as well. Independent Sponsors, previously referred to as "fundless sponsors" and alternatives like search funds and SPACs make it increasingly difficult for selling owners to get clarity on just who's making the outreach to buy their company, and whether they should have preferences. Here's a quick primer on one of the most common groups.

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6 Secrets to Selling Your Business

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M&A Insight: Seller's Discretionary Earnings
Selling Your Business, Private Equity
M&A Insight: Seller's Discretionary Earnings
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Are you considering selling your business but unsure whether an asset purchase or a stock purchase is the right path for you? Understanding these options is critical, as they significantly impact both the financial outcome of the transaction and the responsibilities transferred to the buyer.

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As founders consider exiting their businesses, it's crucial to understand the landscape of potential buyers, which can broadly be categorized into strategic and financial types.

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Without multiple interested parties, you're stuck being a terms taker instead of a terms maker. But fear not! There's hope on the horizon.

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The Difference Between EBIT and EBITDA
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In the financial landscape, two key metrics often stand at the forefront of business valuation and analysis: EBIT (Earnings Before Interest and Taxes) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

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Are you the sole or primary owner of an S-Corp. or LLC? Thinking you don't have a cap table or don't even know the term? Here's a critical heads-up going into a sale -- you have to prove it with documentation.

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Guiding Your Sale: Structure & Non-Cash Payments
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Turn the tables on buyers views on these terms by making sure they know that you have plenty of belief in the future of your company but maybe you're not willing to let your net worth depend on their ability to run it!

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Private Equity, Selling Your Business, esops
Mike Simpson https://variant.media
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