TMSworld Marketing

September 2024

In the September 2024 Newsletter
Find Your Exit / Events

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Selling Your Business

So, You Want to Sell Your Business?

Easier said than done. Entrepreneurs and business owners need an end goal. That goal may be the gold at the end of rainbow, so to speak. Getting to that end is harder than you can imagine. I know, as I have had three exits. Here are some Practical Pointers learned from three technology company exits.

Exit Strategies

A business exit strategy is a plan for selling a business or sharing ownership in a company to other investors or firms. It can also include plans for discontinuing a business's operations.

There are a few possible exit scenarios:

	STRATEGIC ACQUISITION. Strategic acquisition, also called an acquisition strategy, is a method that one company uses to gain or purchase another, hoping the consolidation of both companies can prove to be more profitable than one by itself. The goal is to increase the acquiring company's market position, profitability, and achieve synergies between the two companies. Learn more.
	GOING PUBLIC. An IPO or Initial Public Offering is a means to give investors a way to get their investment out by moving from a private company to a publicly traded company. It can also provide an infusion of new money to take the company even further toward its vision (or BHAG).
	MANAGEMENT OR EMPLOYEE BUY-OUTS. These are corporate restructuring strategies that involve employees or management purchasing a company, often when the owner retires.
	SUCCESSION. The successor can be a family member or a manager in the company.
	DISCONTINUATION. This can be via liquidation or other dissolution, whereby the company no longer exists.

Nine Practical Pointers on Selling Your Business

I have started, funded, grown, and successfully exited from three technology-based ventures: Radish 1.0, Hybrids Plus, and Radish 2.0 (aka Radish Systems, LLC). All of my exits have been through Strategic Acquisitions using an M&A (Mergers and Acquisition) process. Mergers and acquisitions are transactions that combine or consolidate businesses or their assets. The main difference between the two is that a merger creates a new legal entity, while an acquisition absorbs one company into another. Learn more.

My most recent transaction was the acquisition of Radish 2.0 (the company I co-founded with Richard A. Davis, the RAD of Radish) by NLX.ai. NLX combines generative AI, cloud software, and voice, chat, and multimodal technology to deliver conversational customer experiences for large enterprises.

As highlighted in my Telecom Reseller podcast, there are Nine Lessons to be considered in selling a business:

1.	START WITH THE END IN MIND. Define your business as a "means to an end." What are you seeking from your business? Is a strategic exit what you ultimately want? What is the end you want? You may make different decisions along the way.
2.	SEEK STRONG TECH PROTECTION. Protect your Intellectual Property (IP) with strong patents. Radish's ChoiceView® technology was probably 10 years too soon to the market, but it became even more valuable and relevant in the age of AI conversational business transactions.
3.	PERSIST. It takes time to find the right buyer. Even after a Letter of Understanding (LOU), it takes perseverance to complete due diligence, negotiate, complete legal arrangements, get buy-in from decision makers, close, get the money transferred, and transfer assets / IP / people. There may be false starts. Keep going.
4.	SHOW ME THE MONEY. It's not over until the money is in the bank, so to speak.
5.	THERE ARE MANY UNKNOWNS. Little things along the way can turn into obstacles. Minimize them as much as possible. For example, one convertible debt holder in Radish 1.0 and a different convertible debt holder in Radish 2.0 delayed the closings.
6.	WHO. Be very selective in WHO you bring in as co-founders, partners, investors, and support team members. Of course, you should get all the legal protections and ensure they're qualified investors. More importantly, make sure you can trust them and they live true to your values. Seek someone to help you in the M&A process who has actually been a business owner. For example, I offer entrepreneurs and CEOs coaching to help them through the process. My services augment the assistance from an Investment Banker. And I also speak to groups on this topic.
7.	SEEK MULTIPLE BUYERS FOR YOUR COMPANY. This gives you, as the seller, more options. It provides negotiating leverage.
8.	IT'S THE PEOPLE. Seek to take care of your people — they're part of the family. However, keep your selling plans confidential. It will confuse and demotivate employees if you share the details with too many along the way. They may start looking elsewhere.
9.	CONSIDER THE EMOTIONAL ASPECTS. It can be hard to hand your baby off. Our investment banker, Ken Jensen, said that about half the deals will not close due to a founder's change of heart. It can be a big transition — either a Big Loss or a Big Opportunity, or both.

Summary

Selling your business is a process. Work toward your end goal. Protect your technology. Persist. Make sure the money clears and is in the bank. There will be unknowns. Be selective in who you bring in. Strive for multiple potential buyers. Take care of your people. Consider the emotions. And get help along the way.

What is Theresa Doing to Help Companies and Individuals?

Companies have been asking for help to overcome various challenges. Examples include: creative problem solving | planning and executing for growth | building revenue through strategic marketing, customer relationships, and innovation | reducing risks and improving efficiencies through technology, AI, and cybersecurity oversight | and developing talent and culture. Individuals likewise will benefit from having an experienced advisor and coach.

Allow Theresa to help through consulting, coaching, speaking, facilitating, emceeing, and board service. Contact me to learn how I can help you achieve extraordinary results.

Selected Events

September 19-21, 2024. Join me in Gunnison, CO for the Western Colorado University board meetings and homecoming events. Register now.

September 23, 2024. SIPA (Statewide Internet Portal Authority) User Conference in Denver. Join me and learn more.

September 26, 2024. 5:30 PM - 8:00 PM MT. "How to Turn your Transition into a Transformation!" Join me at this free Boulder Business and Professional Women event. It will feature Donna Roe Daniell, author of A Midlife Voyage to Transformation, a memoir about her midlife and a guidebook for midlife women. At Boulder Rural Fire Rescue, 6230 Lookout Road, Boulder. Register now.

October 1, 2024. Theresa speaks at the Leeds School of Business, University of Colorado on "Pursuit of Passionate Purpose."

October 7-10, 2004. Connect with me in Tacoma, WA. If you are close by, let me know and perhaps we can meet up.

Theresa M. Szczurek, Ph.D.
C-Level Executive, Certified Corporate Director, Certified Management Consultant®, Executive Coach, Speaker, and Colorado CIO of the Year

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Theresa M. Szczurek, Ph.D.

Technology and Management Solutions

303.443.8674 Phone
303.496.0088 Fax
tms@tmsworld.com

Pursuit of
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