The journey towards an exit can feel like a marathon that never ends.
If you’ve built your company from the ground up, enjoyed some degree of success along the way and are now working out the most efficient route towards an optimal exit…
Then bringing in minority shareholders to your business can be a game-changer.
BUT business owners who might have resisted ‘diluting’ their shareholding until now, have to decide whether they ultimately want a faster exit and a slightly smaller slice of a much bigger pie. In the end, it’s all about the maths.
When to consider partnering with minority shareholders:
🔸YOU WANT TO ACCELERATE GROWTH. Some owners are relaxed about the rate of growth in their business and are happy to grow at a slower pace. However, if you’re looking to derisk your position and take money off the table in a reduced period of time, then think about how a partner with skin in the game can support your ambitions. A lot of disruption can happen in the market while you are choosing a slower growth trajectory.
🔸 LEVERAGE STRATEGIC OPPORTUNITIES. Collaborating with investors who possess connections, businesses and opportunities in other geographies and markets can take advantage of untapped value which would not be available otherwise.
🔸 BRING IN EXPERTISE. There is no substitute for the know-how from others, who have particular skills and experience, vital to the success of your own business. In turn, their own network will provide exactly what’s required to scale and exit your business.
🔸 SCALE UP. Talking of scale, there are several ways of achieving this objective. One route if through mergers and aquisitions. Choosing the right kind of investors can open the door to inorganic growth and the ability to rapidly scale up your business.
🔸 ACCESS CAPITAL. If external investment is needed to fund a growth plan, support development initiatives or bolster your market position, investors can provide access to some pretty unique sources of funding, whether they’re writing the cheques or opening the right doors for you.
🔸 EXIT. There are sveral types of exit and numerous scenarios within those types of exit. Again, choosing the right kind of investors will help you plot the best course for your end game, accelerate your journey and tee up the exit itself before you even get there.
If you’re considering an exit from your business in the next 2-4 years, bringing in minority shareholders could be a smart move.
Remember, the goal is to make all your hard work pay off in the shortest and most rewarding way possible.