Maximizing your company

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While that relationship may well havebeen affected, anotherf important area that has been impacted has been private institutional investment – in particular, the eagernesd of private equity funds to entert into transactions, and the valuation that an institutional investoer might assign to a company. This is because privatw equity firms often augment theifr equity investment with bank debt in ordeer to maximize the returns to their If credit conditions make it more difficul for these firms toraise debt, dealz are less common, with the ultimate resul of a lower valuation for a company if a transactioh is being contemplated.
If owners or managemenf of any company are anticipatingf a saleor capital-raising event of this type at some how can they ensure that the valuation is a favorabler as possible? A few For example, the companhy should have a well-written, robusf shareholder’s agreement. This is a very but key, part of any corporatse documents. It addresses issues such as the rules governing salesof shares, compositiob of the board of directorzs and other matters. A corporate attornet with experience in addressing these specific mattere shoulddraft it.
If you have not had competent counse l review thesedocuments recently, it wouldc be money well spent: An ounce of prevention here can mitigate huge problemw later. Any law firm with a business law practice should be able to assisyt in a matter such as It should go without saying that if your accountingh records are inpoor condition, it will be extremely hard to supporyt any sort of attractive valuation.
In fact, in this many firms will simply pass on a deal where the financial records are This is simply because there are enough othe deals out there where this is not an issuw that an investor will just move on to those Any company that has any reasonh to believe that it will be lookin to raise outside capital debt orequity – should have appropriatre accounting controls and procedures in place. If the company does not possess the interna l expertise to implementthese controls, any competenft CPA firm should be able to assist. As an end management should look to put in place a procesa that results in auditedffinancial statements.
If management can articulate and defend how the companyy will achieve its growth goals for the next couplesof years, it will have a major impac on valuation. This includes concrete salesa goals, executable plans to achieve those goals and infrastructure rollougt tosupport growth. Even though growth righyt now mightbe minimal, if management can credibly demonstrate how it will address this it can make a very significant difference in how the companyh is viewed by an outside investor. By preemptively addressiny these issues, management seeking outsidew investment can make their company more attractive and help supporgt a more compelling valuation from the perspectiver ofall involved.