My business partner and I are going down the ETA path as a growth strategy for our current marketing agency. We have an investor interested in helping us make a strategic acquisition. They have asked us to present a few options for how the investment could be structured.
For background, they recently sold a business and are not interested in being involved in the company's day-to-day operation. Further, the investor is a blue-collar success story and does not want an overly complex structure.
I have spent my career managing small businesses, not sourcing or structuring outside investments. I am looking for advice, templates, and information to get started. I just finished Buy Then Build and started on the HBR Guide to Buying a Small Business so I am starting to speak the ETA language.
A special thank you to Karen Spencer, whom I met last night at a Twin Cities Startup Week event, for encouraging me to post and get engaged on searchfunder.
Investor Looking for Options
by a searcher from Minnesota State University, Mankato - College of Business
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Maybe I've been in sales for too long (or am too cynical) but that ask from the investor sounds like a great way to not make a decision... Probably a good idea to tie them down to (in no particular order): 1. Tax concerns; 2. Expected hold time; 3. Liquidity concerns; 4. Actual cash/net worth (nothing like a "sure thing" investor committing $400k when the he actually had $50k in the bank... that was a problem) 5. Hard "pass" criteria based on the deal economics (debt coverage mostly)
Most importantly, what do YOU want?
Also wondering about multiples. Ever since silicon valley types woke up to vertical integration in the media buying space, people have looked to have lost their minds, your thoughts?
Thanks