FAQ

Beware of geeks bearing formulas.
-Warren Buffett

Most owners are interested in hearing both the benefits as well as the pitfalls of selling their business.  Here are some frequently asked questions that may be of help as you consider your objectives.

Financial diversification makes sense, but I still don’t like the idea of working for someone.

At Valesco, we have a time tested philosophy about working with management teams.

First, we believe it is important to treat our management teams as partners.  This partner relationship sets a proper tone for working together to accomplish the goals.

Second, the day-to-day management is in your hands. But, in order to be a good partner and support the business, it is important for us to have open access to you and management so we can understand the company’s opportunities, risks and needs.

Third, have a shared view. We should all jointly agree on what our goals are and how they should be measured. 

Fourth, our job is to be a resource to you. Our commitment goes beyond capital.

Finally, talk with our current and past partners. Find out what it’s like to work with us.

How do I know I am getting a fair price?

Pricing is a combination of a number of factors; length of time in business, future growth prospects, past performance, quality of management, defensible nature of the company’s position, to name a few.

In the end, a “fair price” should provide a seller the highest value possible while allowing the ongoing business the ability to pay it’s obligations, provide fair wages to management and employees and offer the buyer a reasonable potential for return on investment.

Every situation is different. And, we believe in sharing the details of our methodology for pricing with a business owner.  This allows for an open discussion about assumptions and expectations which, in turn, can lead to an informed and fair pricing arrangement.

I am concerned about the industry finding out I am for sale

As business owners ourselves, we understand the importance of confidentiality.  We have no need for public announcements or any other form of disclosure that would alert your competitors, employees or the public.

It has always been our belief that transactions of this type should remain private and only be disclosed to those who have a need to know.  In approaching confidentiality this way, we hope to minimize disruption and unwarranted customer concerns.

We will be happy execute a non-disclosure agreement in advance of any detailed discussions to provide you with the highest level of assurance about our commitment to your privacy.

I am concerned about the people who helped me achieve success.  How do I make sure they keep their jobs?

This is a frequent concern of many sellers who feel responsible for the continued well being of the loyal employees who helped them reach their goals.  Valesco has a demonstrated record of retaining the employee base of the companies in which we invest.

Additionally, we provide meaningful equity incentives for key management team members to ensure that they share in the rewards of a job well done.  It is our belief that anyone can buy machinery, buildings and other assets but success can only be achieved with the support of a loyal and committed workforce.

What will I do after I sell?

In most of our business investments, the seller remains actively involved in day to day operations.  While we are always willing to help facilitate a seller’s departure, it is our experience that many sellers want a continued role in the business they help create.

If staying around is not for you, we will be glad to work with you and the company on a plan for an orderly transition, to reduce day to day responsibilities or to pursue other interests altogether.

Why would I consider selling, staying around and reporting to someone else when I can just keep the entire business and continue life as usual?

If you are asking this question, you’re probably happy with your life and the day to day responsibilities of running your business.  But, have you ever considered how much of your personal net worth is wrapped up in your business?

You probably understand the risk of your business. In today’s complex business environment, there are continual threats from which you have limited protection. For many business owners, the exposure they have is a lot like having all their money in one publicly traded stock.  Would you ever take that kind of risk?

It just makes good sense to periodically reflect on whether you should protect against the risk, to you and your family, of having a large portion of your net worth wrapped up in your business.