Serial Entrepreneur and Techstars Mentor. Previously served as Member Vendor Advisory Council of CompTIA. Senior Fellow of Management and Strategy Institute. Corporate Leadership Certified. Certified at Six Sigma Black Belt level.
You can value startup based on Net Assets and Expected Profit (Goodwill). Goodwill represents things like brand name, estimated customer base for product and market value of product. You can calculate expected profit by estimating number and size of contracts and opportunities that you think your product will be able to achieve (keeping in view market base and trends).
You will need to acquire knowledge of core M&A practice areas preferably through some credible certification before starting your M&A consulting practice. You will also need to be aware of various deal sourcing platforms like Deal Stream, Deal Gate, Deal Nexus intralinks etc. You can also join M&A industry association/platform like Alliance of M&A Advisors for networking with peers and industry experts.
While in practice you will need to develop partnerships with other M&A Advisory firms, consultants and investment banks for deal sourcing. You will also need to establish links with institutional and strategic investors including PE Firms and Investment Management Companies including Hedge Funds. For this purpose you can use corporate finance research database like privateequityinfo.com. This will allow you to search and shortlist PE Firms and other Strategic Acquirers based on their investment criteria. You will also find the emails and contacts of their executives in that database.
Remember the only key to success in M&A Practice is your networking and industry contacts that will be of great help for you.
As Managing Partner at M&A Consulting Firm I have extensive experience in providing transaction advisory to ecommerce, SaaS, B2B and consumer focused services and brands.
My core expertise is in IPO Management, Exit Planning, Target Mapping, Deal Advisory, Due Diligence, Managing JVs and Partnerships.
Presently I am engaged as Advisor with several Tech-Startups including start ups in Blockchain space. I have successfully found targets for publicly traded businesses, private corporations and startups for Joint Venture and possible acquisitions.
The best way to promote ecommerce website is through finding appropriate blog and social media sites that the customers in your product space use and visit and then writing something catchy about your product there that could grab the attention of people. If you post the images of your products that will increase the chances of grabbing attention of your prospective customers manifold.
Other than that you can use SEO strategy for this purpose. You can select and use appropriate key words for this purpose through which people will be able to find your product and store through searching on internet.
The other thing you can do is to ask your existing customers to post their reviews on related blogs and websites. You can also provide a space for review on the website of your store. People mostly rely on the experiences of others and positive reviews help in increasing customer base while negative reviews will help you to improve your product.
The best way to value a marketing or advertising agency is through using multiples. There are two types of trading multiples EV (Business Value)/EBITDA and EV (Business Value)/Sales. For marketing agencies we use EV/Sales multiple instead of valuing on the basis of EBITDA as cost concentration is high in this sector and also there are chances of customer concentration as well.
In order to gain organic growth you should focus on expanding product offering. Variety of products will attract more people towards your brand and will increase your customer base. Selling more the same product will be a short time limited scale strategy and will not help your company to grow organically.
If your agreement contains some vesting period or vesting date, they will get their stake in equity on said date or period and on conditions prescribed in the agreement but if there are no specific vesting terms then they will get their equity share on grant date which is the date on which share in equity was granted. If you are looking for an answer to how your stakeholders will be compensated on exit then the answer is that they will be compensated on the maturity of deal as per the percentage of equity they hold in business.
There are several possible ways of exit for a company. Going public with initial share offering or which we call IPO is first option, Trade sale, Buyouts and Leveraged Re-Capitalization are other possible ways.
Whichever exit strategy founders/investors adopt the first and foremost thing is company valuation. There are several ways in which a company could be valued.
You can use Discounted Cash flow Method to discount your Free Cash Flow and then to get Terminal Value using discount rate and growth rate and then discounting the terminal value over the period you discounted your FCF and then to get Implied Enterprise Value. Other than this you can use Trade Comparables using EV/EBITDA or EV/Revenue Multiples. You can use average of your profits to date for calculating Goodwill but Goodwill is not advisable for Startups which are yet in the scaling up phase.
Normally using Trade Comparables is the most suitable valuation method to avoid any type of conflicts. Using the valuation of Company you can then calculate its share price for IPO or you can determine Initial Offering Price if you are going for Buyout.
Usually Trade Sale or Leveraged Re-Capitalization are most suitable form of exit. In a trade sale transaction, owners can also exercise more control over the whole process, and in certain cases might even end up obtaining a higher value for the company compared to other exit methods. While under Leveraged Re-Capitalization you can extract cash without selling company. Under this method you can substitute some of the company’s equity with additional debt. The most important advantages generally associated with leveraged re-capitalizations are that owners can remain in control whilst still receiving payment and the possible tax benefits compared to other types of exits.
Another option is Secondary Buyout which I will prefer over Leveraged MBO. under secondary buyout you can sell your company directly to Private Equity Investor rather than waiting for the management to secure funding through private equity you can offer it directly to an investor.
Owners prefer MBOs because they think that employees of a company could better run it using their existing client base and relations as well as their understanding of that company but if an MBO is carried out through Private Equity Funding it will definitely raise the debts of company and in most cases will transfer partial control of company to the private equity investor in the form of equity transfer.
Other than this MBO may result in low value transfer of company which is not advisable if other options are available. As the management has access to insider information so they may use unfair means to get a lower Enterprise value for lowering the burden of debt to finance the buyout. Another reason is limited access of management to capital which could affect the price and the terms of exit process.
If a company/enterprise is valued well using the proper valuation method benchmarked against industry/market using fair and justified free cash flow then the chances of valuation conflict will be lower than otherwise even if concurrent MBO is going on. It will be much more difficult for the management of company to use unfair mean or to exploit insider information to influence/halt the ongoing exit process.
Look some good marketplace beside apple store and choose some attractive and catchy name for your app to attract your target customers and then grab your social handles especially facebook twitter and snapchat and post links to your app alongwith some unique description. Tag your app correctly to your social links and make use of your own social connections to enhance the outreach of your app.
You can also offer some free beta downloads to get some initial reviews for your app and as a next step you can offer these free downloads to some tech blog writers who can write a blog on your app that will not only establish the credibility of your app but will be helpful in rapidly promoting your app.
You can use google analytics to measure the analytics of your app.
Hoshin Kanri is a tool that allows you to drive a management style that is inclusive and yet focused on results. Hoshin Kanri enables you to assess and align mission with strategies, objectives, goals and actions. There are four phases of Hoshin Kanri Mission Vs Strategies, Strategies Vs Objectives, Objectives Vs Goals and Goals Vs Actions.
You can use Hoshin Kanri for performance evaluation of the organization by aligning it with the performance of employees to keep everyone focused on meeting the organization's goals because Hoshin Kanri is not only a strategy deployment tool but something that creates a catch ball environment for linking top management with executive management and with employees and translates plans in to actions.
I will advise you to use Hoshin Kanri technique for following an inclusive management style with focus on results. It will allow you to get everyone, from top management to employees, on board and to set strategic goals and actions with consensus and to hold everyone responsible for their actions and responsibilities within the organization.
You can adopt this practice to set your goals and track the progress of your organization with regard to goals and strategies on monthly, quarterly or annual basis.
You should keep in mind that people perform best when they have a purpose. When they understand not just what to do but why it’s important. One of the benefits of Hoshin Kanri is that it can help to create that purpose; providing focus and drive towards specific and important goals.
So, it’s worth putting some effort into creating a shared vision of the strategic plan and associated tactics. Make sure as many employees as possible are given an opportunity to understand why the strategic goals are important and how the tactics and operational details support those goals.