At some point in any business venture, it is prudent to sell. You have built a vibrant enterprise from the ground up, but different stages of life can reorient your goals. Whether retirement, overwork, or boredom, the chance to initiate a graceful (and cash-positive) exit often approaches every entrepreneur. But just because you plan to hand the keys to new leadership does not mean the company you built needs to close or fail. You have forged working relationships that shouldn’t be impacted by a changeover — same to your business reputation and personal legacy.
There are financial considerations, as you need to recoup the time, energy, and capital invested in the project. Finding the perfect buyer can become a complex task (especially if you plan to stay in the company in an advisory capacity). There are no do-overs after the final sale, so let’s explore what you should look for in a business investor and sale partner.
3 Signs of a (Seriously Good) Business Investor
As strategic growth experts, we at ABCO have facilitated numerous acquisitions, mergers, company sales, and investment exits for business owners in several industries. Through each successful deal, we have found that the ideal business investors have the following three characteristics:
1. They have relevant experience
The right candidate will have both robust industry understanding and a successful history of acquisitions. The sale of a business can take years to execute, and no deal is ever the same — the right investor will be able to offer a clear, articulated vision of your company’s future. Such insight can only come from someone with deep knowledge in the relevant field alongside a patient understanding of the sale process.
2. They have a well-connected industry network
Investors and new leadership will understand the inherent risks related to the acquisition. But financial capacity is not enough. If you want your business to accelerate to its current growth targets once you exit, the new investor group must be able to expand the company into new markets with a set time horizon. Such expansion is only possible if they have a well-connected and trustworthy business network.
3. They bring clear value-add to the company
Investors buy a company because they can support possible performance increases. Large enterprises often pursue strategic acquisitions to help resource smaller outfits or fill technology or skills gaps to boost profit margins, revenues, and sales.
When selling your business, the potential candidate should clearly explain how they will directly contribute to the maturation of your company (e.g., production increases, process optimization, capital increases, etc.). Of course, there are many other aspects to consider when selling your business. It is a personal and complex decision that should not be taken lightly. But the structure and execution of the deal should not cause undue stress, especially if you have support from a knowledgeable partner.
ABCO Group is a holding company with expertise in business financing, acquisitions, and strategic business growth, and we can guide you through a painless deal process. Contact ABCO Group today for more information about our partnership opportunities and questions about acquisitions/investment exits.