How to Maximize Your Company’s Value


About the Episode

Our conversation with Jon Taylor, author of Maximize Your Multiple, focuses on the intricacies of valuing a business and the top mistakes sellers make in preparing their companies for sale. Jon’s hands-on expertise covers a wide range of industries, and he talks about institutional and individual buyers, the importance of the valuation process, and how to avoid the most common mistakes when selling your business. Getting the most for your business starts with understanding its value, and understanding how to make the most of that value starts with this discussion.

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In this Episode

3:55 What is enterprise value?
6:20 Why are most businesses hard to sell?
6:50 What is an institutional buyer?
7:55 How are an institutional buyer’s objectives different from an individual buyer’s?
9:00 What makes a business a candidate for an institutional investment?
9:40 Do all institutional investors have a short time horizon?
11:05 Is a strategic buyer the holy grail of buyers?
13:00 How do you determine who the ideal buyer is?
14:40 What characteristics do institutional buyers look for in companies?
16:15 How important is a management team when selling your business?
17:30 Why do unprofitable tech businesses sell for top dollar?
18:50 Is there one main method for valuing a business?
20:30 What are current EBITDA multiples?
21:00 Why do software companies sell at high multiples?
22:00 What other industries sell at high multiples?
22:30 Do institutional investors use discounted cash flow to value a business?
23:40 Do you sell a business with or without a price?
25:20 Why don’t you share the valuation with the buyer?
26:40 Do buyers have access to the full financial statements before submitting an LOI?
28:20 The institutional money deal-making process explained
30:05 How long does the closing process take?
32:00 How involved does the owner need to be in the process?
33:20 What is the biggest problem you encounter in preparing a business for sale?
34:40 How long does the marketing process take?
35:20 What is an indication of interest (IOI)?
36:20 Is there a difference between an IOI and an LOI?
37:40 What is the negotiating process like?
39:40 Who attends the management meeting (a.k.a. PowerPoint Party)
41:25 What are the management meetings like?
45:10 What happens after the management meeting?
48:00 When does phase three, the closing, start?
48:50 What yard line are you on when the LOI is signed?
49:50 Are you usually committed to one buyer who performs due diligence?
50:45 How involved is the seller in due diligence?
51:30 How long does the closing process take once the LOI is signed?
51:55 What happens after the closing?
54:15 Top mistakes sellers make when selling their company
54:30 Mistake #1 — Timing
1:02:50 Mistake #2 — Not being fully committed to the process
1:06:50 Mistake #3 — Not having a handle on your financials
1:13:50 Mistake #4 — Poor documentation

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Resources Mentioned in This Episode

Meet Our Guest

Jon Taylor

Jon Taylor

Managing Director at Stanton Park Capital

Jon has over 20 years of merger and acquisition, strategic advisory, and business valuation experience and has successfully advised clients across a broad range of industries, including government services, aerospace & defense, business services, technology, consumer and industrial products, and metals and mining. He has closed over $2 billion in aggregate transaction value in his career. Prior to founding Stanton Park Capital, Mr. Taylor served as a Vice President at Moss Adams Capital (MAC), a West Coast-based investment banking firm. Before joining MAC he was a Vice President with Capstone Partners.

Mr. Taylor earned his B.S. in Economics with concentrations in Finance and Real Estate from the Wharton School at the University of Pennsylvania and an MBA from Georgetown University’s McDonough School of Business. He is a National Association of Certified Valuators and Analyst (NACVA) Certified Valuation Analyst (CVA).

Jon is the author of Maximize Your Multiple: The Business Owner’s Guide to the Institutional Money Deal, a book that helps entrepreneurs build and sell their compa

Location Location: Palo Alto, California
Phone Phone: 781-228-3523

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