Mergers and Acquisitions might sound like something just for Wall Street and publicly traded companies.
However, there can be great value for successful business owners and entrepreneurs in joining forces with another company to grow their business, to exit when the time is right, and for investors looking for a solid private market opportunity to help a company reach its full potential.
Legally speaking there are many different options. Businesses can merge with both sets of owners joining forces to run the combined venture. In these cases, candid conversations may help figure out who is the best person for each role.
For example, one set of business owners might prefer to let the other side take on the headaches of
day-to-day running the business. Another person might be best cast as the visionary leader, heading up marketing, or heading up operations.
When you don’t have to wear all of the hats, being part owner of a larger company might just let you wear
the hat that fits you best.
In other cases, the owners of one company may be bought out and move to a new venture or retirement. Or the company may bring on a new investor to grow to the next level, in a less dramatic version of the
made-for-TV melodrama of the show Shark Tank.
The exact nature of the deal, whether buying assets, selling stock, swapping equity in your current company for ownership in a new company, or contributing assets in your current company for an equity stake in a new venture have many tax and legal consequences and require careful planning.
There are lots of ways to move forward from a lawyer’s vantage point, but the real questions from business
owners are often focused on how any of these sorts of transactions can help them meet their goals – either growing their business, increasing returns, a larger share of the office, geographic expansion, offering new services and products, or the like.
Where the businesses and the business owners are really compatible, where the culture of the companies
mesh, and where the numbers and business prospects make sense, the sum can really be greater than the individual parts.
However, there can be great value for successful business owners and entrepreneurs in joining forces with another company to grow their business, to exit when the time is right, and for investors looking for a solid private market opportunity to help a company reach its full potential.
Legally speaking there are many different options. Businesses can merge with both sets of owners joining forces to run the combined venture. In these cases, candid conversations may help figure out who is the best person for each role.
For example, one set of business owners might prefer to let the other side take on the headaches of
day-to-day running the business. Another person might be best cast as the visionary leader, heading up marketing, or heading up operations.
When you don’t have to wear all of the hats, being part owner of a larger company might just let you wear
the hat that fits you best.
In other cases, the owners of one company may be bought out and move to a new venture or retirement. Or the company may bring on a new investor to grow to the next level, in a less dramatic version of the
made-for-TV melodrama of the show Shark Tank.
The exact nature of the deal, whether buying assets, selling stock, swapping equity in your current company for ownership in a new company, or contributing assets in your current company for an equity stake in a new venture have many tax and legal consequences and require careful planning.
There are lots of ways to move forward from a lawyer’s vantage point, but the real questions from business
owners are often focused on how any of these sorts of transactions can help them meet their goals – either growing their business, increasing returns, a larger share of the office, geographic expansion, offering new services and products, or the like.
Where the businesses and the business owners are really compatible, where the culture of the companies
mesh, and where the numbers and business prospects make sense, the sum can really be greater than the individual parts.
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