28 Jun Around the Web: A Week in Summary
A recent article from the Axial Forum entitled “Fundless or Funded: That Is the Question for Bankers” explains the effects fundless sponsors and family offices are having on deal-making and how they are becoming more prominent among business deals. The article explains that information availability is helping one-man teams and smaller firms take hold of the marketplace and succeed on their own, whereas private equity previously led these areas.
In almost all aspects, these funding models are much more flexible than the traditional methods, which make them very viable and attractive options for all parties involved. This is pulling some big players into a different arena, one that changes up the competition and ultimately improves margin.
The recent Divestopedia article “3 Tips on Avoiding Deal Fatigue in an Unsolicited Approach Scenario” outlines the process that should be taken when an unsolicited acquisition proposal is presented to an unsuspecting owner. While these types of scenarios can be validation that a business has been performing well and is viewed positively in the marketplace, they can catch an owner off-guard and even be disingenuous attempts by competitors to steal information and leak private business practices to the market.
Important considerations to make if presented with an unsolicited offer include the following:
- Decide what information to give
- Manage expectations
- Keep your money on your mind
Whether or not an unsolicited offer is beneficial to an owner or business is entirely dependent on the business and the situation. There are benefits and drawbacks to accepting an offer or moving forward with the sale process at an unexpected or unplanned time, but the owner is the ultimate judge of what is right.
A recent article posted on The Business Journals entitled “How to Pass a Family Business from an Overbearing Father to the Next Generation” illustrates a hypothetical example of a difficult business transition from a ruthless old-school owner to a seemingly less passionate and less aggressive family member. It explains how transitioning from an overbearing leader is often difficult because not only are potential family successors unmotivated to take over, existing employees are also alienated due to harsh and improper treatment.
The author’s solution for this is forgiveness: when it comes to business, animosity can kill motivation and productivity and revenge is never the right answer. Business survival relies on proper practice and great leadership, among many other factors, so forgoing personal grudges for a seamless transition can prove to be vital to future and ongoing success.