Permanent Podcast: Real Talk About Private Equity and Buying, Selling, and Operating Small Businesses

While it's common for Private Equity firms to charge fees as part of the transaction, these fees can take on many forms.  Some firms are transparent and only charge enough to cover their expenses, others not so much.  In this episode, we cover fee types and structures, as well as things you should watch out for when examining the fees your potential buyer plans to assess.  Discussion with Brent Beshore and Emily Holdman starts @ 1:43.

The math behind Net Working Capital seems straightforward, but agreeing on this number is often the most contentious part of doing a transaction.  Why is there so much nuance and why is getting this number right so critically important?  This episode dives in to this crucial negotiation point and we share how we almost lost our first deal because of it!  Discussion with Brent Beshore and Emily Holdman starts @ 1:35.

In situations where the buyer and seller disagree on future earnings, earnouts help bridge the gap by taking a "wait and see" approach to a portion of the valuation.  But they can also cause trepidation in sellers as they introduce uncertainty.  In this episode, we lay out some questions you should consider before agreeing to an earnout in your transaction.  Discussion with Brent Beshore and Emily Holdman starts @ 1:53. 

The podcast explores the types of cash at closing and their impact on a company after the close. They discuss the consequences of putting debt on a company's balance sheet and the complexities of leveraging multiple types of debt. The chapter emphasizes the importance of balancing current value with long-term viability in private equity and cautions against entering complex capital structures.

In many ways, the deal components are more important than the purchase price.  When it comes to purchase price, there is often a tug-of-war between buyer and seller.  This episode explores this back and forth by looking the motivations, mechanics, and messiness of agreeing on a price.  Discussion with Brent Beshore and Emily Holdman starts @ 1:55.

Exploring the complexities of business valuation, including the use of multiples, present value of future cash flows, financial structures, and managing expectations in the market. Highlights the importance of understanding business value and transfer risks in the private equity market.

Learn about the importance of hiring an intermediary in the sale process of a business, their role in protecting information and facilitating successful deals, and the qualities of good intermediaries in marketing a business.

Brent Beshore, a transaction strategies expert, and Emily Holdman, who specializes in building top-tier advisor teams, delve into the art of assembling a winning advisory team. They draw inspiration from Larry Bird's unique selection strategy, emphasizing humility and resourcefulness. The discussion highlights the balance between expertise and personal connections when choosing advisors, cautioning against over-reliance on recommendations alone. A must-listen for anyone looking to optimize their business transactions!

Picking a great team of advisors is the most important transaction decision you will make.  So what should your team look like?  What should you look for in an advisor?  In this episode we discuss the members and attributes necessary to build a stellar advisor team.  Discussion with Brent Beshore and Emily Holdman starts @ 2:58.

Investors and advisors often speak in terms of “multiples.”  The key question is: a multiple of what?  Potential buyers are interested in the true earning power of your business.  This episode explores the ins and outs of EBITDA and other methodologies for measuring earnings.  Discussion with Brent Beshore and Emily Holdman starts @ 1:38.