Valuation considerations

To find the cash a business can realistically pay out each year, we consider:

• Cyclicality, volatility and one-off items across an economic cycle
• Maintenance capital spending, or software development, needed to sustain the business
• Working capital, and whether the business needs more of it to keep running and growing
• The market salary of a manager to step into the owner's role

The multiple we apply reflects the quality of the business. We consider:

• Room for future growth
• Predictable revenue, diverse customers and overall resilience
• How cyclical or volatile the business and its products are
• Competition and the dynamics of the industry

We don't invest in real estate.

Our principals back every investment, so no outside financing is needed. If it ever were, we would say so in our term sheet. This keeps the deal certain and fair for everyone.

We prefer straightforward cash offers. We're open to other structures, but cash is the simplest to complete and the most transparent. In our experience, earnouts and other incentive structures often cause friction.

Tell us your priorities and we'll shape the deal around them. For example:

• Partnering with your general manager if they want to buy in but need financing
• Honouring commitments to employees or business partners, even verbal promises
• Staying on, or stepping away completely
• Keeping a minority stake to share in future growth
• Staged payments or seller financing, if you don't need all the cash now, in exchange for a higher price or interest income
• Anything else that matters to you