Every business owner eventually shares one common problem. At some point, they want to capitalize on the value they have created. They want a liquidity event. As retirement nears, or the need to diversify grows, they will want to convert their equity into passive income or transition it to another investment vehicle. Capital simply can't produce the additional income or provide the long-term security they are seeking.

While taking chips off the table has several advantages, many owners are not looking for a complete, immediate exit from their business. The steady hand that has guided the ship for so long can be an essential asset to the organization. In this context, both the financial and managerial “liquidity” must be considered.

Most external transactions occur when the owner sells a majority share in their business to professional investors. In order to protect their investment, the buyers will require a controlling stake in the organization. If the owner remains active in the business, often times earn-outs, bonuses under employment contracts or other considerations are made that depend on the financial performance of the seller's business post-liquidity event.

For these reasons, the quality of potential investors should be a critical element in a seller’s assessment of a transaction. AG Capital's philosophy is to avoid the standard approach of widely distributing a potential seller to as many investors as possible. This has the potential to lead to undercapitalized investors looking for a quick flip or other potentially disastrous scenarios. Mass marketing to buyers does not fit with an owner's vested interest in the long-term success of the business.

AG Capital steers clear of the open market, working only with quality institutions that have the resources and outlook to match your vision for the future. We conduct our own selection process prior to matching owners with investors which leads to more effective introductions and a higher rate of successful engagements.

Whether an owner is seeking investment for diversification or a capital infusion for further growth, it is important to remember that every dollar is not created equal. The partner you choose will be at least as important as the capital itself. Guidance, vision and experience will shape the future of your continued interest in the business you worked so hard to build.