Posts Tagged ‘sale’

Minority Investment Sense

Tuesday, October 2nd, 2018

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If you are a F1 or NASCAR motor racing team forced into a line-up change, by a key team member wanting “out”, your logical thought process is find, pick and win with an ideal replacement. It is not how much the replacement might pay us for the role unless you are so poorly funded that you have surrendered power and control over your team’s future (witness the “also rans” on the F1 grid).

The same logic applies when a seller seeks to realise a minority investment in a private company investment. Yet a great many advisors and investors, particularly with highly ambiguous and moderate growth businesses, insist on a flawed logic, secure a symbolic price before entering meaningful discussions with the key constituents. Perhaps that polishes their “ego” but it is rarely meaningful or immediately useful to the seller (quick and impressive exit).

In the absence of peer-level trusting partner, you are looking at pseudo sale success.