Part Two – The Market
At the moment due to funding challenges, MBIs are almost impossible. There are still some MBOs getting done and you have a chance to get these away, provided of course you can get funding.
According to Steve Cook of Empire HR there’s plenty money sloshing about for deals £20m to £100 Million, but there’s a challenge at the low end.
Steve’s talk was more about his two experiences of Venture backing: setting up, bringing in a corporate venturer and then selling Empire 1, followed by MBO / MBI of Empire 2.
Steve’s top quote of the evening was “The key thing is ‘just being lucky’.”
He had a number of key tips to share: firstly, to make sure you prepare an exit before you start. “Get all your ducks in a row”, to coin a phrase.
Steve also advised to make sure to cut costs and don’t spend any money in the last year in order to inflate the profit and valuation. Everyone needs to be “on the bus”, ie aligned with the plan and the vision. And all fo the partners must agree the roles and expectations in advance of the process beginning. It’s essential to have a very robust shareholder agreement.
Steve recommended Jim Colin’s book “Good to Great”
If you’re interested in learning more about MBOs/MBIs, take a look at Murray Strachan’s blog