Work record / Capital / BridgePoint Air / Questions answered
BridgePoint Air: questions answered
What people ask me about BridgePoint Air, and my answers. The project itself has its own page.
How did you show the buyer what the owner's value really was?
We wrote one page, in the buyer's language, and no model. A buyer of a firm like this worries about two risks: a few clients carrying the revenue, and the business depending on one person. Normally they cure those with an earnout, an escrow or a retention deal. We flipped both. The clients were there because of him, and he was staying, so the dependency was exactly what they were paying for. Most of our time went into that framing before anyone touched the number, and I worked the other equity holders' positions next to his.
Where did the equity holders disagree most?
What the other holders negotiated is theirs to keep private. The person who took the most moving was the owner. He believed the buyer held every card because of its size, and a seller who prices himself low has lost the room before it starts. He needed to see his own leverage before the buyer saw it, so that came first.
What did you walk the owner through so he would believe his leverage?
The same page we later gave the buyer, and he saw it first. It listed what someone buying a firm like his prices, concentrated clients and dependence on one person, what usually fixes each, and why putting names on a board changes neither, since a board is gone once the deal closes. Read that way, what he took for weak spots were why the buyer was there at all. The relationships were his. So was the book. And he would still be in the building the morning after closing.