Maximizing your company

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While that relationship may well havebeen affected, anothef important area that has been impacted has been privates institutional investment – in the eagerness of private equity funds to entet into transactions, and the valuatioh that an institutional investor might assign to a This is because private equity firms often augmentf their equity investment with bank debt in order to maximize the returns to their If credit conditions make it more difficult for theser firms to raise debt, deals are less with the ultimate result of a lowe r valuation for a company if a transaction is being contemplated.
If owners or management of any company are anticipatingg a saleor capital-raising event of this type at some how can they ensure that the valuation is a favorable as possible ? A few suggestions: For example, the company should have a robust shareholder’s agreement. This is a very basic, but key, part of any corporate documents. It addresses issuesa such as ownership, the rules governing sales of shares, composition of the boarx of directors andother matters. A corporate attorney with experience in addressinv these specific matters shoulddraft it.
If you have not had competenr counsel review thesedocuments recently, it would be money well An ounce of prevention here can mitigate huge problemsd later. Any law firm with a busines s law practice should be able to assist in a mattef suchas this. It should go withou t saying that if your accounting record are in poor it will be extremely hard to support any sort ofattractivse valuation. In fact, in this market, many firms will simply pass on a deal wherwe the financial recordsare suspect. This is simpl because there are enough other deals out there wherew this is not an issue that an investor will just move on tothoswe deals.
Any company that has any reason to believr that it will be looking to raiss outsidecapital – debt or equity should have appropriate accounting controls and procedures in If the company does not possess the internal expertise to implemen t these controls, any competent CPA firm should be able to As an end result, management should look to put in placse a process that results in audited financial If management can articulate and defend how the compant will achieve its growth goals for the next couple of it will have a majo impact on valuation. This includes concrete salez goals, executable plans to achievr those goals and infrastructure rollout tosupporg growth.
Even though growth right now mighrtbe minimal, if management can credibly demonstrate how it will address this it can make a very significant differencew in how the company is viewedr by an outside investor. By preemptively addressing thesee issues, management seeking outside investment can make theirt company more attractive and help supporty a more compelling valuation from the perspective ofall