Tom Franceski and his two partners built DocStar up to 45 employees when they decided to shop the business to some private equity (PE) investors. The PE guys offered four to six times Earnings Before Interest Taxes Depreciation and Amortization (EBITDA), which Franceski deemed low for a fast-growing software company.
In fact, he and his partners wanted at least two times revenue for the business, which they knew they could get when Epicor, a strategic buyer, came knocking. In this episode, you’ll learn:
- Why strategic buyers pay more than financial ones
- The definition of a frictionless acquisition
- How to use a cocktail of seller financing and mezzanine debt to buy a company with little of your own money on the line
- The difference between in- and outbound marketing
- How acquirers secretly evaluate your business without you even knowing they’re sizing you up
Do you know who the natural strategic buyers are for your business? Knowing and courting the strategic acquirers in your industry can be a great way to get a premium for your company. We’ll help you build your short list of strategies in Module 11 of The Value Builder System™—get started free by completing the Value Builder questionnaire.
About Tom Franceski
Tom Franceski is vice president and general manager of DocStar – (www.docstar.com), a division of Epicor Software Corporation. DocStar’s proven business process automation technology and workflow expertise empowers organizations to operate at peak performance, navigate change, and grow. Prior to DocStar, Tom was the Vice President of Technology Products for Authentidate Holding Corporation for 11 years. Tom holds a BS degree in Accounting from Le Moyne College.
Do You Know An Entrepreneur With A Story To Tell?
We’re constantly on the prowl for interesting stories from owners who have sold their businesses. We look for owners who have sold a business that was generating $1 million or more in revenue, who are willing to share their story candidly with our community. Forbes ranked Built to Sell Radio one of their top 10 podcasts for entrepreneurs and we have more than 100,000 downloads, so your story will get shared with a great community of like-minded owners. Nominate yourself or someone you know today.
At Built to Sell we’re all about shifting the balance of power from the buyer to the seller. If you support our mission, please write a review on iTunes—and if you have any comments or questions you can find us on Twitter and Facebook. Tune in every Wednesday for another episode of #BuiltToSell Radio with John Warrillow.
If you decide to sell your business to an outside acquirer, you’re going to have to decide between a financial and a strategic buyer. Understanding the different motivations of these two buyers can be the key to getting a good price for your business.
Susan Hrib started an oil and gas industry consulting firm called Signum back in 1994. Recently Hrib received a call from an industry contact who said they would be interested in buying Signum. After more than 20 years in the same company, Hrib decided she was ready to move on.
What’s Your Business Worth?
Take the 13-minute survey and get your Value Builder Score
The Value Builder Score was inspired by the book, Built to Sell. It was created to help business owners like you build more valuable companies. Join more than 30,000 entrepreneurs by getting your free Value Builder Score, and find out how valuable your company really is.
Get Your Score Now It’s free and 100% confidential.