Sell Your Company in 150 Days – Part 4: Developing Confidential Offering Materials

Stage 4: ECP Develops Confidential Offering Materials

ECP Ventures offers a disciplined, diligent, structured 10 Stage 150 Day sales transaction process for business owners to sell their businesses with sell side M&A representation.

ECP Ventures works interactively with our clients to prepare confidential offering materials that highlights and showcases your business's accomplishments, strengths, market position, and growth potential. These materials are designed to attract serious, qualified buyers.

A critical responsibility is to create an excellent "value conveyance" that effectively communicates the true value of the business being represented.

What Buyers Really Want to Know

We say all the time that buyers will ask 500 questions but they really only want one answer. They want to understand what the value of the company will be to them the day after they acquire it.

Are there quality earnings? Does the company have transferrable value? What are the future opportunities for growth and expansion? What opportunities have been completely missed by the current owners? What risk factors should be evaluated? Is there a talented management team? Will the employees remain with the company after the transaction? How much CapX will be required in the upcoming twenty-four months? How are products or services priced? What is the customer concentration? Why is the current owner selling?

That is just a very small sample of the types of questions an intuitive savvy buyer will ask. The key is to answer the buyer's questions before they are asked. This is where it is imperative to develop offering materials that actually answer questions.

Beyond Historical Financials

Advisors often place too much emphasis on historical financials. We assert that historical financials are equivalent to yesterday's newspaper. Yes, they set a foundation but they do not begin to address the buyer's focus on the future value of the company after acquisition.

A strong illuminating representation includes operating metrics, trend analysis, sensitivity analysis, margin analysis and achievement and forward-looking projections.

Offering materials should not be one size fits all. A high-quality M&A Advisor will understand a specific buyer and that buyer's industry. They will target materials to represent a good synergistic or financial fit with the buyer's business objectives. The materials should also represent the ease of transition that the company being sold offers.

At ECP we believe that the days of an extensive CIM in the LMM are over. We strive to provide a fully illuminating representation with an Executive Summary of 10+ pages instead of the dreadful 50+ page CIM's. We create dynamic, clear, concise representations with impactful illuminating presentation formats to ensure that the reader's attention is fully captured.

In summary, you have one chance to make a great first impression with a buyer. It is worth maximum effort to do the most effective "value conveyance" possible.