we’ll discuss some of the lesser known, but frequent challenges that can occur when selling a company. While most are avoidable, they can still be tricky issues to navigate in a business sale process.
According to participants in yesterday’s Bricktown Capital Conference in Oklahoma City, Oklahoma has a need for more robust venture capital, nurture capital and in some cases private equity, when an entrepreneur needs between $1 million and $5 million to fuel the growth of their business. For any higher amounts, out of state capital is targeting Oklahoma companies, and for amounts below $1 million, there are small business grants, loans, incentives, family money and even bootstrapping that can provide the required capital. It is the critical gap in between where we need to focus our efforts.
Numerous studies have shown that a more efficient and better managed dataroom, disclosure and due diligence process can lead to higher acquisition prices and higher closing success rates for the sellers of midsized companies.
In the last year, huge numbers of loans were refinanced on the back of competition among lenders to sell money and attractive loan pricing. As a result, many CFOs have now refinanced, put their loan documents away and will revisit them in a few years when it’s time to renew. Unfortunately, it’s not that easy anymore; in particular in a sluggish and faltering economy, as your creditors keep a closer eye on all the covenants of your loan.