2018 CEO Private Equity Exits | Top 6 Lessons Learned

Below are the top 6 lessons learned from the CEO Exits panel assembled & moderated by BSG Managing Director Clark Waterfall at the 5^th annual PE CEO Exits Panel event held in Spring of 2019. For more no BSG’s Wartime Leadership Series and Leadership Interview podcasts, see https://www.bostonsearchgroup.com/wartime-leadership-series and https://www.bostonsearchgroup.com/blog/topic/videocast

Exceed the earnings you present in your CIM.
Never too early to begin work on the QoE.
Throughout the process, priority one is RUN THE BUSINESS, the process is a second order issue.
Work hard to find the value others will see in the business and leverage those attributes.

Spend money on a custom 3rd party market research report on your industry. Size your company’s position, competitors, growth, trends, etc. This brings instant credibility to the opportunity you describe in your CIM.

Once your strategy is in place, make sure you have the right team and be prepared to make changes to the team. You need a team aligned with your strategy and possibly new members who have successfully executed in certain areas or fill gaps. Know this, and do not wait! Time lost impacts speed, execution, and the right results. During the exit, you will now have a core team of talent that will shine. During the sale process, the next buyer is evaluating the management team as part of the overall business.
Get your team prepared for a marathon: doing their day jobs extremely well and doing the full time job associated with the sale process…pamper that team along the way.
Try to keep the meetings with bankers and potential buyers to you and your CFO only. Leave the rest of your executive team to run the business until you are down to your final potential buyer or two.
Get others to do your “day job” because it is an 80 hour a week job running the sale process
Have fun and show your prospects that you are having fun. Buyers pay up for successful teams they like!

Hire the very best investment banker; it will be worth it.
The i-banker knows the process and how to network. As CEO, you know the business. Be sure to push for fireside chats or the ability to meet with the buyer decision maker(s) in a small group setting. What is the new potential owner blueprint that will drive further success and taking the company to the next level?
Spend time to get to know the investment banker that will be working with you on the process (actually the person working with you, not the figurehead).
Be open to multiple buyer meetings; do not set an artificial limit on the number of prospects you will meet with.

You can have the best product or service, but if the customer experience and relationship are not stable, you risk churn. That was one of the most critical metrics, and during the sale process when we conducted customer surveys of our top 10, we had stellar feedback, which was very rewarding and made the buyer very comfortable in closing the transaction.

The deal attorney: hire the best deal attorney you can find. Their ROI will be well worth the high fees
The Board: the board of directors is typically made up of not just the PE financial experts, but former industry executives with great success. The CEO needs to cultivate those relationships and leverage their knowledge and network strategically and for problem-solving. They are there to help and not just provide oversight.

-by Clark Waterfall on Apr 19, 2019 3:03:00 PM

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