Maximizing your company

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While that relationship may well havebeen affected, anothef important area that has been impacted has been privatse institutional investment – in the eagerness of private equit y funds to enter into transactions, and the valuatiojn that an institutional investor mighft assign to a company. This is because private equity firms oftejn augment their equity investment with bank debt in ordert to maximize the returns to their If credit conditions make it more difficulf for these firms toraise debt, deals are less with the ultimate result of a lower valuation for a company if a transaction is beingt contemplated.
If owners or managemen t of any company are anticipating a saleor capital-raising event of this type at some point, how can they ensured that the valuation is a favorablde as possible? A few For example, the company should have a well-written, robusy shareholder’s agreement. This is a very basic, but key, part of any corporater documents. It addresses issues such as the rules governing sales of composition of the board of directors and other A corporate attorney with experiencs in addressing these specific matters shoulddraft it.
If you have not had competentg counsel review thesedocuments recently, it would be money well An ounce of prevention here can mitigate huge problemas later. Any law firm with a business law practice should be able to assist in a matteer suchas this. It shoulsd go without saying that if your accountint records are inpoor condition, it will be extremely hard to supportt any sort of attractive In fact, in this market, many firms will simply pass on a deal wherr the financial records are This is simply because there are enough other deals out there where this is not an issue that an investorf will just move on to thosew deals.
Any company that has any reason to believw that it will be looking to raise outsidecapitao – debt or equity – should have appropriatr accounting controls and procedures in place. If the company does not possessd the internal expertise to implement these any competent CPA firm should be able to As anend result, managemenft should look to put in place a process that resultw in audited financial statements. If managementf can articulate and defend how the company will achieve its growth goals for the next couplweof years, it will have a majort impact on valuation. This includes concrete sales executable plans to achieve those goals and infrastructure rollourt tosupport growth.
Even though growthb right now mightbe minimal, if managemengt can credibly demonstrate how it will addressx this issue, it can make a very significant difference in how the companhy is viewed by an outside By preemptively addressing these issues, management seeking outsidee investment can make their company more attractive and help supportg a more compelling valuation from the perspective of all involved.