See Your Company The Way It Might Look To An Investor

Written by Mike Shapiro | | February 25, 2016
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It’s always a good idea to take a step back and look at your company the way it might look to a stranger. And not just any stranger. Someone who was in the market to buy invest in — or even buy outright — a company like yours.

Suppose you were looking for venture capital and knew your company was being examined by an investor.  Imagine you were staging and preparing the company for sale, starting with snapshot today vs. what it should look like at time of offering, gap analysis and action plan to close gaps. What would you see?

Company Snapshot

  1. Examine P & L. Look at current sources of revenue and each major item of expense for opportunities to improve.
  2. Look at current clients. Which ones are contributing the most to the company? How can the company do more business with them and find more like them?
  3. Identify key employees and examine retention strategy. Cultivate and develop new key employees, if appropriate to ensure continuity.
  4. Examine all vendor contracts, customer contracts, license agreements, buy and sell agreements and other arrangements that might affect a sale.
  5. Evaluate current retirement and health plans and other benefits.
  6. Evaluate audit procedures and accounting practices.

Ideal Buyer Scenarios

  1. Create profile of ideal buyer. Determine whether a market exists.
  2. Identify key aspects of company ideal buyer will be looking at.
  3. Determine most-probable ways ideal buyer will pay for the company. Consider benefits/negatives of each method from business and tax perspectives.

Owner’s Role — Now And Later

  1. Examine owner’s expected income needs after the sale, determine total cash amount needed to generate this income and how much of the total is expected to come from the sale of the business.
  2. Examine impact on owner’s estate plan.
  3. Examine owner’s role now and expected for the future.

Next: If You Decide To Look For Investors Or Sell Your Company

How-To-Manage-And-Ship-A-Great-Product-Ebook-Mock-Up

Learn How To Manage & Ship A Great Software Product

Get 20 lessons about how Software CEOs can grow their team, improve their culture, and create efficient work processes on the way to building a massively successful Software Company.