Ed (age 60), owned a property and casualty insurance agency. He was in poor health and hired me to take immediate action to ensure the assets in his business would be transitioned properly and efficiently rather than in a distressed sale. First, we built his basic estate plan so the business interest would pass to his heirs outside the probate process. Second, we developed a short-term strategy in an MSP to facilitate the sale of the business, even if he was no longer alive, leaving his daughter in charge of the transition. We were able to sell the business successfully following Ed’s death, providing cash flow to his family while balancing the buyer’s need to minimize his risk in the acquisition.

I recently sold a company in the construction business to a PE–backed, multibillion-dollar company that had already acquired other similar companies in different parts of the country. My client carefully interviewed other sellers to this PE-backed business and discovered, much to his delight, that the sellers were all ecstatic about how they were treated by the buyer and the way in which management allows the acquired companies to continue to operate as part of a greater whole but independently in the way they customarily do business. The PE-backed management simply tries to add value based on experience with the acquired companies and provides information and guidance to their acquired companies, gleaned from operating similar successful businesses. That’s an ideal PE buyer.

In another case, Don raised PE capital to fund his retail consumer products business. The PE firm wanted to be deeply involved in the management of a business they just funded. By contrast, Don had operated this business successfully for many years in his own way but did not necessarily follow the rules the PE firm wanted to impose. It only took 1 year of struggling to work together before Don demanded that the PE firm be bought out. That experience cost Don significant time, money, and, most of all, energy in dealing with a PE investor who really did not meet his needs.

One Saturday afternoon several years ago, I received a call from a friend of one of my kids. He was frantic. His father had just died suddenly and unexpectedly. He was frozen with fear and anxiety. I had begun working with his dad on estate planning and Business Success(ion)™ planning, but we hadn’t even started the process when I received the dismal news.

The father had started a government contracting business and had received a small investment from 2 close friends with experience in the space. He was a “service-disabled veteran,” which qualified his business for special treatment under the Small Business Administration rules. Most of his contracts were “service-disabled veteran organization” small business contracts, meaning that a business had to be owned 51% or more by a service-disabled veteran to be able to bid on a government contract.

Like many entrepreneurs, the father did not have a will or any other documents to plan for his death or disability. Fortunately, I had experience in both estate planning and business planning and went to work with the family on formulating a framework to protect the founder’s investment in his business.

We leaped into action. We formed a board of directors consisting of the 2 outside investors who had extensive experience in government contracting, 2 family members, and me. We studied and analyzed the financial performance of the business, mobilized an accounting firm to give us current financial information, and, with the help of the experienced investors, recruited managers to try to replace the dynamic founder.

The managers stepped in and serviced existing business successfully. Meanwhile, the board met monthly to ensure the continued growth of the business and evaluate its operations and performance.

The board’s goal was to determine whether the company could be sold and, if so, at what price and when.

We chose an investment banker who felt the company could be sold, and at a much higher price than the others projected. We signed an engagement letter with the investment banker and proceeded into an auction process to sell the business. Several months later, —we closed the transaction, yielding the family and other investors over $29 million!

Tia wanted to engineer a management buyout of an RIA. The seller was not actively involved in the day-to-day management, and she and her partner (a huge financial services company) were interested in spinning off the investment advisory business to focus on other things. Tia was the president of the company and had been successful in growing the RIA business from scratch (with the seller’s help). Her biggest challenge was finding financing for the acquisition, which she overcame when she found a local bank that was willing to finance the deal. Tia negotiated a successful MBO, and, after raising additional funds in a later transaction with a PE firm to support the growth of the company, she ultimately grew the company and resold it a decade later. She and the other equity investors kept a rollover equity stake in the ongoing entity and were able to sell their interests for an increased multiple over what they paid for the business originally. All in all, it was a very successful MBO story.